As automobile technology continues to revolutionize the way vehicles are manufactured, sold, and even enjoyed, investors are always on the prowl for new financial opportunities. That being said, it’s the used auto market that is gaining the most traction with investors right now.
Across the United States, as the new vehicle market continually ebbs and flows, used vehicle sales have been on the rise for seven consecutive years.
According to CNBC, investors are being encouraged to search for stocks with more exposure to used vehicles over newer models. This has been a key trend that is projected to continue well into 2019.
Used vehicle platforms like Caravan, which has developed a national presence in the digital retail sector, are leading the charge for financial returns for used car investments.
“We’re seeing a substitution away from new vehicles to late-model used vehicles,” said Jamie Albertine, Consumer Edge Researcher. “So what we’re really watching is, as SUVs come back to market off-lease and they’re 20% to 25% less (expensive) than the brand new vehicle counterpart, … consumers [are] opting for that value option.”
Back in 1898, the Empire State Motor Wagon Company in Catskill, New York held one of the country’s very first used car lots. The sued auto market is substantially larger than other retail sectors, including school and office supplies (valued at $206 billion annually) and the home improvement market (valued at $291 billion annually). On average, there are roughly 38.5 million used vehicles sold each year.
According to Zacks, in the past six months, CarMax’s — the largest used car retailer in the country — stock has gained 5.9%, outperforming the industrywide 3.4%. Used car stock investment and sales can be directly attributed to the share increases. During the first-quarter of fiscal year 2019, CarMax’s used auto sales increased 1.6%, due to robust used sales and an overall healthy economy.