Used car sales in the US are surging this month with shares of the USA’s largest used car retailer CarMax leaping 33%.
“CarMax is positioned well as frugal consumers seek value in used cars,” said Craig Kennison an analyst at US financial services company Robert W. Baird. “Meanwhile, credit availability has returned to pre-recession levels.”
CarMax, which in 2009 retailed 350,000 cars from 103 outlets, reported earnings this month that exceeded analysts’ estimates as used car prices in the US climb back to near record levels, helping profit margins. Kennison believes the company’s September sales will reveal double digit growth.
“People are selling cars that they can no longer afford and buyers are looking for a cheaper, but quality vehicle,” said Jim Iurio, of stockbroker TJM Institutional Services.
“You can see a similar theme playing out with shares of AutoZone,” said Steve Cortes, founder of Veracruz Research, citing the all-time high posted by the car parts retailer today. “They are both benefiting from the frugal consumer buying used cars at CarMax and fixing their own with parts from AutoZone.”
Is this a trend we are likely to witness here in the UK? Many Used car dealers will hope so but with supply issues still a major factor in the UK the same success may be difficult to replicate.