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Customer LoginsRegistration data suggest correlation between economy and consumer buying patterns
IHS Markit vehicle registration data illustrate the correlation between retail purchase behavior and the macro economic environment. In particular, as household incomes deteriorated and capital dried up during the 2008-2011 recession, the mix of used to new registrations shifted towards used, peaking at almost 3.5 used registrations for every new one in 2009 (see chart below). Since then, this ratio has reverted to pre-recession levels including a ten-year low of 2.15:1 (used to new) last year.
The mix of registrations within the used category shifted as well during the downturn, with registrations of used vehicles that were registered for the second (or greater) time as a used vehicle climbing after 2008. By 2011, this category of used registrations had reached a ten-year peak of 70%, followed by a steady decline to its current level of 66%. First-time registrations of a used vehicle (generally higher priced than older used products), whether coming off lease or not, have recently climbed to near record levels for the ten-year window.
This recent strong demand for first-time used vehicles in part reflects the wider availability of Certified Pre-Owned vehicles backed by factory warranties, and it also points to a fertile market for those OEMs investing in CPO programs.
Lastly, the percent of new vehicle registrations attributable to households that had owned a used vehicle but returned to market and acquired a new vehicle dipped during the recession but recently has climbed, as shown below.
This last trend illustrates the positive correlation between US macroeconomic metrics and consumers' willingness to move up from a used to a new vehicle.
Tom Libby is Manager, Loyalty Solutions and Industry Analysis, IHS Automotive
Posted September 2, 2016