Snap-on Diagnostics: Size and Scope of Used Vehicle Market Continues Impressive Growth
10 November 1997
Snap-on Diagnostics: Size and Scope of Used Vehicle Market Continues Impressive Growth
LINCOLNSHIRE, Ill., Nov. 10 -- It's well documented that
growth in the used vehicle market in recent years has been nothing less than
explosive. In fact, used vehicle sales are up by more than three million
units since 1990, to nearly 41 million in 1996. Some of the factors driving
this growth are used vehicle certification, improved customer service and the
advent of the used car superstore. So who's buying what, where and why?
Snap-on Diagnostics, a leading developer and distributor of diagnostic
equipment and repair systems for the automotive service industry, has
highlighted some key facts and figures about the $365 billion used vehicle
market:
Used Car Sales Data
-- In 1996, nearly 41 million used vehicles were sold for representing a
market segment of $365 billion. That is 54 percent of the total value
of the worldwide automotive market. The $365 billion figure includes
transactions from new car dealers, independent dealers and sale by
private individuals. (ADT Automotive)
-- Four million 2-to-4 year old vehicles were sold in 1996. (J.D. Power &
Associates)
-- Private-party transactions accounted for about 11.6 million of used
vehicle sales in 1996. (CNW Marketing Research)
Used/New Vehicle Prices
-- The average price consumers paid in 1996 for a used vehicle was
$8,957. (CNW Market Research)
-- New car prices will increase 1O percent by 2000 due to government
equipment requirements. (University of Michigan)
-- Automobile dealers selling new cars lost $2.90 per unit in 1995, while
used-car sales showed a profit of $300 per vehicle. (National
Automobile Dealers Association)
Customer Information
-- On a per capita basis, Kansas, Nebraska, Iowa and Vermont residents
are the most frequent used vehicle purchasers at 500 used vehicle
transfers per 1,000 drivers. (Used vehicle transfers, CNW Market
Research; licensed drivers, U.S. Department of Transportation; new
vehicle registration, R.L. Polk)
-- In terms of used vehicle sales volume the top six states are
California (more than 4 million); Texas and New York (3-4 million);
Florida, Ohio, Pennsylvania (2-3 million). (Used vehicle transfers,
CNW Market Research; licensed drivers, U.S., Department of
Transportation; new vehicle registration, R.L. Polk)
Customer Preferences
-- According to a survey of 1,113 prospective used vehicle customers:
- 28 percent of consumers prefer to shop for a used vehicle at a new-
car dealership with a manufacturer's certification program
- 18 percent of consumers prefer to shop from a private party
- 15 percent of consumers prefer to shop at used-car superstores
- 3 percent of consumers prefer to shop at dealerships without
certification programs (Dohring Co.)
-- Consumers are willing to spend 29 percent of their annual income for a
used vehicle compared to 32 percent for a new car. (J.D. Powers &
Associates)
-- Nearly 20 percent of shoppers who set out to buy a brand new car end
up buying a nearly new one instead, usually a 2-to-3 year old vehicle.
(CNW Market Research)
Used Car Superstores
-- Superstores will be responsible for about 3.6 percent of the used
vehicle market by 2000. (ADT Automotive)
-- Contributing to the strength of the used vehicle market is the
effectiveness of auctions in redistributing vehicles to markets where
demand is greatest. (ADT Automotive)
Leasing
-- New car leasing is leveling off at 35 percent, meaning a continued
supply of late-model, low-mileage used vehicles for the foreseeable
future. (ADT Automotive)
Snap-on is a leading manufacturer and distributor of quality hand and
power tools, diagnostic hardware and software, and tool storage units for
professional technicians, industry and OEMs. The Snap-on Diagnostics group, a
business unit of Snap-on, operates Centers of Excellence dedicated to research
and product development involving underhood and undercar service, large
diagnostics, small diagnostics, shop equipment and emissions testing
equipment. Diagnostic products and services are sold through the company's
franchised dealers who call on the nation's one million automotive technicians
weekly. In addition, other diagnostic products and services are marketed
under various brand names and channels of distribution.
SOURCE Snap-on Diagnostics
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