Used-Vehicle Prices at Highest Level Since 2001
Used-vehicle prices have rebounded to the highest level since 2001, reflecting a sharp decline in the number of cars and trucks coming off lease and the number of trade-ins from new car sales, according to the Detroit News. At the end of March, the average retail selling price of a used vehicle was $13,888, up from $13,703 a year ago, according to the latest data from the National Automobile Dealers Association (NADA). The latest rise in prices means dealers are offering more money for trade-ins. According to the Detroit News, the spike in used car prices may soon be blunted, however, Flat new-vehicle sales are prompting automakers to offer higher incentives, which will likely result in lower used-vehicle prices and larger inventories of trade-in vehicles. Several automakers have also timed vehicle leases to end in May and June – the heart of the prime selling season, further fattening used-vehicle lots with off-lease vehicles, said Raj Sundaram, president of Automotive Lease Guide in Santa Barbara, Calif., as reported in the Detroit News article. Sundaram believes they'll dip in the second half, ending the year about two percent lower. But, he predicts a strengthening economy will prevent new vehicles from depreciating as fast, meaning prices for used cars and trucks could climb still higher. Since December, wholesale prices on used non-luxury vehicles have increased at an annualized rate of 6 percent and wholesale prices for used luxury vehicles have climbed 2 percent, said Paul Taylor, chief economist for the NADA, in the Detroit News report. With gas prices starting to affect buying decisions, wholesale prices of used pickup trucks and SUVs are also starting to fall, according to the Detroit News. But prices for fuel-efficient small cars are rising as demand increases.