In an economy slowly recovering from the recession, it may come as no surprise that used car sales are up for the third quarter of 2014.
Leading the way is CarMax, the nation’s largest used car dealer, which also sells new cars. The company reported a 16% increase in quarterly revenues and a 28% increase in fiscal earnings, and shares of the company rose 8% in premarket trading.
Part of the uptick in sales may be due to greater availability of credit and auto loans this year. The average loan for used cars rose nearly 4% in the third quarter to $18,576, according to the Manheim Used Vehicle Value Index — the highest it’s been since 2005.
CarMax’s used car sales rose 17% in the third quarter, which ended Nov. 30, and accounted for more than 75% of the company’s total revenue.
Total used car sales for CarMax reached $2.79 billion, with the total for sales and operating revenue at $3.41 billion.
The numbers for CarMax reflect a national trend among other used car sellers.
Lithia Motors reported back in October that third-quarter same-store sales for used vehicles grew 13% from 2013, outpacing the 11% increase the company saw for new cars.
Penske Automotive Group saw a third-quarter jump of 11.6% for used car sales in October, compared to just 9.2% for new cars.
Group 1 Automotive’s third quarter profits increased to 31%, representing their biggest gain in the past two years.
In general, the ability to buy a pre-owned vehicle also represents a more budget-friendly option for many Americans, who will spend around half as much on average for a used car than they would on a new car.
TrueCar reports that the average price of a new car in 2014 is $31,831; for used cars, the average cost is only $16,335.