{"id":26534,"date":"2020-12-30T15:01:38","date_gmt":"2020-12-30T19:01:38","guid":{"rendered":"http:\/\/henrypayne.com\/?p=26534"},"modified":"2020-12-30T15:01:38","modified_gmt":"2020-12-30T19:01:38","slug":"used-car-boom-car-buyers-take-refuge-in-affordable-sedans","status":"publish","type":"post","link":"https:\/\/henrypayne.com\/index.php\/2020\/12\/used-car-boom-car-buyers-take-refuge-in-affordable-sedans","title":{"rendered":"Used-car boom: Car buyers take refuge in affordable sedans"},"content":{"rendered":"

With a dearth of new cars priced under $20,000, average new-car transaction prices pushing $40,000 and vehicles lasting longer than ever, the used-car market is primed for growth as cost-conscious buyers shop for their next vehicles.<\/p>\n

Mix in the COVID epidemic \u2014 with financial insecurity and a reluctance to use public transportation\u00a0\u2014 and\u00a0the used market exploded. And some of the hottest commodities out there? Used Japanese sedans.<\/p>\n

\"Jennifer<\/p>\n
<\/div>\n<\/figure>\n

The second half of 2020 saw the hottest pre-owned vehicle\u00a0market in years. In June alone, used-vehicle\u00a0sales were up 22%\u00a0\u2014\u00a0the most since 2007, according to Edmunds.com.\u00a0Edmunds sees that trend continuing in 2021 with a forecast of used-vehicle sales up 7% to 41 million sold.<\/p>\n

After the Ford F-150 and Chevy Silverado pickups (consistently the top two best-selling used vehicles), the next best-sellers were the Honda Accord, Honda Civic, Toyota Camry, Nissan Altima and Toyota Corolla.<\/p>\n

Sedans might\u00a0be taking a backseat to trucks and SUVs\u00a0in the new-vehicle market, but on the pre-owned lot, their affordability and fuel efficiency remain irresistible. Combined with healthy, extended warranties and more durable chassis and drivetrains, sedans are winning over customers and earning brand loyalty for new buyers.<\/p>\n

Jennifer Nickerson, 39, of Westland bought a used\u00a02017 Honda Accord for her family this fall. She traded in her husband\u2019s used Ram 1500 pickup at LaFontaine Honda in Dearborn.<\/p>\n

\u201cGas prices brought him to the\u00a0Accord,\u201d said Nickerson, who bought the sleek made-in-Ohio sedan for $15,000 with about 30,000 miles on the odometer. \u201cThe pickup was a monster to refill.\u201d<\/p>\n

Dealers say\u00a0fuel economy is a common reason for going with used sedans. The Accord, for example, gets 30 mpg compared to the thirsty Ram V-8\u2019s 17.<\/p>\n

But there are other factors that influence buyers that uniquely benefit sedans. They are generally $1,000-$1,500 cheaper than comparable SUVs, meaning Nickerson\u2019s $15,000 Accord was not only a whopping $10,000\u00a0cheaper than a new\u00a02020 model, but it was cheaper than a comparable Honda CR-V SUV. With a 16-year-old son starting to drive, affordability was key.<\/p>\n

\"Jennifer<\/p>\n
<\/div>\n<\/figure>\n

That affordability came with an extended, bumper-to-bumper warranty of eight years\/120,000 miles \u2014\u00a0better than a new Accord at three\u00a0years\/36,000 miles.<\/p>\n

Lafontaine Automotive Group Used Car Director Eric Benson said Dickerson\u2019s experience is not unusual. Combine low interest rates, increased new-car lease rates\u00a0and extended warranties, and he says used vehicles \u201ccan cost two-thirds of the price of a new car.\u201d<\/p>\n

In addition to veteran customers like Nickerson, Benson says used cars have become key to luring first-time buyers.<\/p>\n

So successful has Honda been at attracting first-time customers through its pre-owned business that it\u00a0now offers a sales portal for used cars through its own manufacturer website. It’s the first mass-market brand to do so.<\/p>\n

\u201cRising new-vehicle transaction prices make used and certified pre-owned\u00a0vehicles an increasingly important entry point to vehicle ownership for both young and first-time buyers,\u201d\u00a0Honda said\u00a0in launching the service this month.<\/p>\n

Detroit brands also see used cars as key to bringing in new buyers as Ford, Chevrolet and Chrysler all exit the small-car market.<\/p>\n

\u201cSelling new cars under $20,000 is a money-loser for Detroit manufacturers,\u201d said LaFontaine\u2019s Benson. \u201cThey can\u2019t make them at a profit. So they are increasingly emphasizing the certified, pre-owned market to keep getting new customers into their brands.\u201d<\/p>\n

Benson\u2019s colleague, Gordy Koenig, said\u00a0LaFontaine Group\u2019s used-car sales are up 10%\u00a0this year over last, with continued growth ahead. He is predicting a 15%\u00a0increase in 2021.<\/p>\n

Bumper.com\u2019s Alessandro Mannino sees the same trend nationally. Bumper examined over 134,000 vehicle searches across all 50 states from April 1-Sept. 15 to monitor buying trends.<\/p>\n

\u201cA lot of this has been driven by people in places like New York City where they are moving out of the city and need a car,\u201d he said. Plant shutdowns caused by the pandemic in spring\u00a0tightened new-car inventories and wallets. An\u00a0aversion to public transit and ride-sharing drove more buyers into the car market.<\/p>\n

For example, the No. 1 used (and new) Honda\/Acura dealer in the nation this summer was Paragon Honda in Queens, as New York\u00a0residents swarmed\u00a0the dealership looking for fuel-efficient, metro-friendly sedans.<\/p>\n

\u201cNo one is going into New York. It is a ghost town,\u201d said Paragon general manager Brian Benstock, noting subway ridership\u00a0has plummeted from 5 million a day to 1.2 million. \u201cPeople are working from home, they are unemployed, they aren\u2019t comfortable riding on a subway, bus or rideshare. Twenty-five percent of that market is shifting to personal, used vehicles.\u201d<\/p>\n

\"Jennifer<\/p>\n
<\/div>\n<\/figure>\n

Bumper.com\u2019s data indicates the affordable sedan trend could be here to stay as buyers find good cars without new car prices.<\/p>\n

\u201cThe average age of vehicles searched is 12 years old,\u201d said Mannino. \u201cThat shows users are willing to buy older vehicles they see as reliable vehicles. Overall, pickup trucks are the most popular vehicle for used-car buyers. But after that, sedans were the most-searched vehicles in 11 states, while SUVs were the most-searched in only three.\u201d<\/p>\n

Only the Jeep Grand Cherokee and Ford Explorer (No. 9 and No.10 respectively) SUVs broke the Top 10. The average oldest vehicles searched are the Honda Accord and Ford Mustang (15 years each).<\/p>\n

The Ford F-150 (Ford was the most-searched vehicle in 31 states) and Chevy Silverado pickups were the most popular used-car searches,\u00a0dominating across the southern, middle\u00a0and western states. But midsize and compact sedans \u2014 led by Honda \u2014 were No.1 in states as varied as California, Connecticut, Georgia\u00a0and Virginia.<\/p>\n

With regulatory costs and the addition of new electronics driving up new-vehicle costs, both U.S. and foreign brands have seen average new-car transition prices soar. Kelley Blue Book reports the average new-car transaction price at $39,259 for November.<\/p>\n

LaFontaine\u2019s Koenig says the used market is increasingly important as a refuge for cost-conscious buyers: \u201cSeventy to 80%\u00a0of our sales are for vehicles less than $20,000.”<\/p>\n","protected":false},"excerpt":{"rendered":"

With a dearth of new cars priced under $20,000, average new-car transaction prices pushing $40,000 and vehicles lasting longer than ever, the used-car market is primed for growth as cost-conscious buyers shop for their next vehicles. Mix in the COVID epidemic \u2014 with financial insecurity and a reluctance to use public transportation\u00a0\u2014 and\u00a0the used market […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"_links":{"self":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts\/26534"}],"collection":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/comments?post=26534"}],"version-history":[{"count":1,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts\/26534\/revisions"}],"predecessor-version":[{"id":26535,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts\/26534\/revisions\/26535"}],"wp:attachment":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/media?parent=26534"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/categories?post=26534"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/tags?post=26534"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}