One of my favorite sayings growing up as a kid was, “One man’s trash is another man’s treasure.” While these words can have a very literal meaning, at its essence, it means that everything has a value to someone.
There couldn’t be a more fitting circumstance to apply this saying than when you look at the automotive industry, especially in relation to leased and certified used vehicles. After all, most certified used vehicles were once leases.
According to a recent analysis, Experian Automotive found that consumers in larger metropolitan areas leased more vehicles than were purchased new, and those in smaller areas tended to buy more certified used* vehicles than new. Cities such as Detroit and New York saw extraordinarily high volumes of leases. During the analysis period**, leases accounted for 67.9 percent of all new vehicle registrations*** in Detroit, while they accounted for 49.8 percent of new vehicle sales in New York.
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Top 5 metropolitan areas new vehicle lease penetration |
|
|
Detroit |
67.9 percent |
|
New York |
49.8 percent |
|
Flint, Mich. |
49.1 percent |
|
Youngstown, NY |
46.5 percent |
|
Cleveland |
43.6 percent |
By comparison, cities such as San Angelo and Victoria, Texas had the two highest percentages of certified used registrations compared to overall vehicle sales. San Angelo had 26.7 percent of its total vehicle sales fall under the certified used category, while Victoria had 25.1 percent.
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Top 5 metropolitan areas for highest percentage of certified used vehicle sales |
|
|
San Angelo, Texas |
26.7 percent |
|
Victoria, Texas |
25.1 percent |
|
Corpus Christi, Texas |
24.4 percent |
|
Odessa, Texas |
24.3 percent |
|
Lubbock, Texas |
24.2 percent |
“Not every market is the same. Economic and social issues often drive sales,” said Brad Smith, director of automotive market statistics for Experian. “Detroit for example, benefits from the presence of Chrysler, Ford and General Motors, as well as numerous suppliers and many friends and family programs. By gaining insight into consumer purchasing behavior in their market area, dealers and manufacturers can take more targeted actions with regard to managing their inventory, capitalizing on growth opportunities, gaining new customers and improving profitability.”
Further analysis found that from a brand perspective, MINI had the highest percentage of certified used vehicles compared to total vehicle registrations**** at 32.7 percent, followed by Ram (28.9 percent), Hyundai (28.3 percent), Mercedes-Benz (28.3 percent) and Kia (27.7percent).
So, which certified vehicles are consumers purchasing the most? The analysis showed that the Toyota Camry had the highest volume of certified used registrations, followed by Nissan Altima, Ford F-150, Ford Fusion and Chevrolet Silverado.
The next time you are in the market to buy, which will you get … new or certified used? While not every vehicle type is going to meet every person’s preference or specific situation, by understanding what metal is moving in the market, dealers, manufactures and consumers can find the “treasures” that best fit their needs.
*For the purposes of this analysis, certified used vehicles are an approximation based on model year parameters (0-5 years old)
**Analysis was based on January-September 2014 data
***Minimum 10,000 new vehicle registrations
****Minimum 100,000 vehicle registrations