Do Used Car Customers Buy Old Cars? We Have The Answer.
Are you a dealership that automatically wholesales out all trade-ins more than three or four years old? You may want to reconsider. Why? Because you might be ignoring a large sector of the used car buying public.
If you’re like most dealers, you sell significantly more used vehicles than new cars, and the current market conditions are likely to continue that trend. A huge number of off-lease vehicles turning over, combined with a decline in household spending, is driving more interest in used cars among buyers nationwide. Are you paying enough attention to your dealership’s reconditioning and remarketing operation?
What can we learn from the last 600,00 auto loan inquiries? In a recent study by LendingTree, more than 600,000 auto loan queries were studied in over 100 popular metropolitan areas, and they found that the average age of a used car people sought to finance was about five years old. The data set was limited to inquiries submitted in 2019 for cars and light trucks with model years older than 2019.
That may be shocking to most dealers who may not consider a five-year-old car for anything other than the “under nine grand land” which tends to just exist as a small backlot for a handful of cars that are clean enough to resell.
Geography does matter, though. This trend could be a combination of different economies, regionally and stricter inspections and registration laws. But the spread of those who purchased newer used cars and those who purchased older used cars is pretty scattered.
Residents of Spokane, Washington, purchased the oldest used cars with an average age of at least 7.66 years.
Facts about metros that buy the oldest cars
1. Spokane, Washington is the metro area that sought financing for the oldest cars, with 7.66 years old on average.
2. Wichita, Kansas came in second with car buyers here seeking loans for cars just under seven years old.
3. Ogden, Utah ranked third nationally for those seeking to buy the oldest cars, with an average age of 6.80.
4. More southern cities joined the top 10 this year, including Knoxville and Chattanooga, Tennessee, and Greenville, South Carolina.
5. Across the board, the average age of vehicles for which people are seeking financing has dropped from 6 years in 2018 to 5.34.
6. Colorado Springs residents finance cars with an average age of 6.63 years old.
Facts about places that buy the newest used cars
1. San Jose, California buys the newest of the used cars, with an average age of 3.54 years.
2. Miami, Florida is in second place with an average age of just under four years old.
3. Orlando, Florida’s average used car purchase age, is just slightly under five years old.
4. San Francisco sought loans for cars with an average age of 4.03 years
5. Los Angeles and Oxnard California stand at 4.42 and 4.67 years, respectively.
6. On the East Coast, Washington D.C. to Boston largely sought newer used cars.
7. New York residents buy used cars with an average age of 4.04 years.
8. Texas residents financed used vehicles with an average age of 4.14 years old
In cities where buyers preferred newer used cars, the cars average 4.12 years younger than the ones purchased by buyers in the places that buy the oldest used cars. This is an interesting statistic, and one worth watching to identify shifts in markets.
So what can we learn from this? As more and more car buyers turn to used cars, it could help grow sales to be aware of the ages of cars that people finance in your area. Clean and quality units still exist out there, and it may make sense to have your buyers experiment with different years to see if it holds true in your municipality.
Regardless of the average age of used cars you sell, they all need attention to make them frontline-ready as efficiently as possible. We can help with that. Contact us to learn how we can reduce your costs and increase your margins on used cars.