Used Car Dealers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 23,700 used car dealers in the US sell pre-owned vehicles purchased from the general public and other sources. Unlike new car dealers, used car dealers generate little revenue from maintenance and repair services. Most firms outsource service agreements to a third party.
High Cost of Inventory
The used car dealer industry is capital intensive with most firms requiring outside funding to build inventory, which accounts for 55-59% of total assets.
Shift to Digital
The COVID pandemic accelerated the shift to digital transactions in the used vehicle dealer industry.
Industry size & Structure
The average used car dealer operates out of a single location, employs 6-7 workers, and generates $7.2 million annually.
- The used car dealer industry consists of over 23,700 firms that employ 183,600 workers and generate $169.5 billion annually.
- The industry is concentrated at the top and fragmented at the bottom; the top four companies account for about 20% of industry revenue.
- Large firms include CarMax, DriveTime, and America’s Car-Mart. AutoNation and Penske Automotive Group also have used car dealerships.
Industry Forecast
Used Car Dealers Industry Growth
Recent Developments
Sep 27, 2024 - Sales Fall, Employment Flat
- Used car dealer sales fell 10.6% in June 2024 compared to a year ago and declined 7.7% from the previous month, according to the Census Bureau. Producer inflation for used vehicle dealers fell 15.3% in July 2024 compared to a year ago, according to producer price data from the US Bureau of Labor Statistics. Prices are still 5% higher than before the COVID-19 pandemic after spiking due to supply problems resulting from pandemic challenges. Employment by used car dealers was flat in July 2024 year over year, while average wages for nonsupervisory employees grew 3.9% during the same period, reaching $24.09 per hour.
- Used vehicle inventory levels at franchised and independent dealers were up at the beginning of September 2024 compared to a month ago, reaching 2.18 million units, according to an analysis by Cox Automotive of vAuto Live Market View data. Retail used-vehicle sales reached 1.54 million vehicles at the start of September 2024 compared to the start of August 2024, a decline of 2%. The average used-vehicle listing price fell to $25,172 at the start of September 2024 from $25,425 in August 2024. Supply is limited at lower price points, with used cars below $15,000 showing a 31-day supply, which is the lowest since March 2021.
- A new study by iSeeCars shows that consumers are increasingly turning to older used cars to try to keep their costs down. According to the study, the market share of used cars 10 years or older has grown by 30% since 2014. The popularity of older cars is also driving up prices, with the average price of an older car increasing over 60% from $7,583 in 2014 to $12,194 in 2024. According to the study, older sedans, wagons, and hatchbacks account for 16 of the 20 cars with the highest growth in older car market share. The study examined 169 million used car sales from the period of January 2014 to June 2024.
- The average age of cars and light trucks in operation on US roads reached a new record in 2024 of 12.6 years, up by two months over 2023, according to S&P Global Mobility data. More than 286 million vehicles are in operation in the US in 2024, which is 2 million higher than in 2023. In 2024, 35% of vehicles were under six years old, reflecting the impact of the COVID-19 pandemic and supply chain issues that disrupted the vehicle supply. Vehicles in the 6-14 year range and older are expected to represent 70% or more of vehicles in operation for the next five years. In terms of electric vehicles (EVs), there were 3.2 million EVs in operation in 2024. The number of EV registrations in 2023 passed 1 million units for the first time, which was a 52% increase compared to 2022. According to Todd Campau, aftermarket practice lead at S&P Global Mobility, "We started to see headwinds in EV sales growth in late 2023, and though there will be some challenges on the road to EV adoption that could drive EV average age up, we still expect significant growth in share of electric vehicles in operation over the next decade.”
Get A Demo
Vertical IQ’s Industry Intelligence Platform
See for yourself why over 60,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.
Build valuable, lasting relationships by having smarter conversations -
check out Vertical IQ today.