Top Auto Dealer Cashes In on Consumers Settling for Used Cars

This post was originally published on this site
© Reuters. Top Auto Dealer Cashes In on Consumers Settling for Used Cars© Reuters. Top Auto Dealer Cashes In on Consumers Settling for Used Cars

(Bloomberg) — Rising car prices are pushing more Americans out of the new-car market, but that’s not a problem for AutoNation Inc (NYSE:).

The biggest auto dealer in the U.S reported record fourth quarter and 2019 earnings thanks in part to profits from used cars, which jumped 21% in the last three months of the year on a same-store basis.

Automakers had another year of more than 17 million new-vehicle sales in 2019, though they propped up deliveries by spending on incentives and relying on rental-car companies. Consumers are likely to buy fewer new cars and trucks in 2020, but the used market will keep total volume for dealers roughly flat, said Cheryl Miller, AutoNation’s chief executive officer.

“That’s because of affordability,” Miller said in a phone interview. “Given that increase again in new-vehicle pricing, we’re going to see some preference for used vehicles for consumers.”

AutoNation earned $1.74 a share from continuing operations in the fourth quarter, up from $1.02 in the year ago period. The Fort Lauderdale, Florida-based retailer’s shares surged as much as 11% on Tuesday, their biggest intraday jump since July.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Add Comment