DriveTime’s used sales volume jumps 11% YoY through April

Retailers’ used-vehicle sales increased through April as affordability pressures led consumers to buy older, less expensive vehicles. Tempe Ariz.-based DriveTime ’s used-car sales jumped 11% year over year through April, Chief Executive Mary Leigh Phillips told Auto Finance News . The sales growth came “with more customers shifting to used [cars] in attempts to find affordability,” she said. Annual tax refunds also boosted April sales, Phillips said, noting that it did not “translate into more demand than normal for the season,” despite refunds that were higher than normal . Despite higher prices for used cars, demand is robust due to economic challenges facing consumers, Paul Fortin , co-founder and head of automotive products at Exponential Markets , told AFN . The Exponential Used Vehicle Index rose 4.5% year over year and 0.8% month over month to 152.51 at the end of April. “Supply has been recovering. … At the same time, used-vehicle demand remains supported by rising new-vehicle prices and interest rates, resulting in affordability issues, which is driving consumers to the most current economical option: used vehicles,” he said. Used-vehicle values have dropped 9% from “the all-time market high experienced during COVID,” plateauing as supply rises from 2022 lows, while affordability pressures keep used-vehicle demand high, Fortin said. For Delavan, Wis.-based Kunes Auto Group , used-vehicle sales “remain the driver for our business,” Finance Director Scot Hensel told AFN , without providing details. Hensel also said tax refunds supported a seasonal rise in sales, though it wasn’t “significant from prior years.” “Customers are still using [tax] refunds to get into the market, but more of that money is going toward managing payments, rather than trading up,” Hensel said. DriveTime and Kunes’ focus on used-vehicle demand mirrors upticks in used-car sales reported by retailers Sonic Automotive and Lithia Motors in the first quarter. Sonic’s used sales rose 6.5% YoY and Lithia’s used sales rose 2.6% YoY , according to their earnings releases. Dealers eye older vehicles Hensel and Phillips said they were looking at older vehicles to provide consumers with more affordable options. “Affordability is pushing more customers into lower price points, so we need to have options for those buyers,” Hensel said. DriveTime’s sweet spot for years has been a 5- to 6-year-old vehicle with around 75,000 miles, DriveTime’s Phillips said. However, the retailer is considering “increasing the upper boundary of what we’ll look at for certain vehicle types,” she said. “In the past, we may have maxed our vehicle age [for large trucks] at 8 or 10 years, and now we’ll go up to 11 or 12 years to accommodate, subject to certain mileage and other restrictions,” she said. With an estimated 2.5 million off-lease vehicles expected to return to market in 2026 , dealers may be able to get younger used inventory for consumers, Phillips said. “More helps,” she said. “The market as a whole is projected to remain supply constrained for some time. It helps but is not such a massive total quantity that it changes a whole lot about what we’re buying.” GoFi , an indirect auto lender under the DriveTime family of companies , is still on track to originate between $500 million and $600 million in 2026, Phillips said. Loan performance at Bridgecrest , which services auto loans under the DriveTime family, has been “relatively flat year over year,” she noted. Hensel and executives from OpenRoad Lending , Edge Financial Services and Anderson Brothers Bank will discuss nonprime risk management and resilience in a session at Auto Finance Summit East in May. To see event agendas and register, visit autofinance.live .

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DriveTime’s used sales volume jumps 11% YoY through April

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