Used Car prices

February 7th, 2012 - Joe Duarte

The slowing rate of depreciation on used vehicles over the course of the year will lead to even stronger trade-in values.

used-car-lotPrices expected to continue rising

The U.S.’ National Automobile Dealers Association (NADA) is predicting that used vehicle prices will continue to rise through 2012, due to an increase in demand and a drop in supply.

“Consumers shopping for either a new or used vehicle will benefit this year from higher trade-in values along with loosening credit,” said NADA executive and auto analyst Jonathan Banks from the NADA Convention and Expo inLas Vegas. “For dealers, reliance on customer trade-ins will increase as they strive to meet the challenges of growing demand in a supply-constrained market.”

The NADA Used Car Guide predicts used vehicle prices will rise by 1.8% by the end of 2012, peaking in April and May. That is less of an increase than seen the previous year – used vehicle prices increased 3% in 2011.

“The slowing rate of depreciation on used vehicles over the course of the year will lead to even stronger trade-in values and enhance the equity consumers have in their vehicles,” Banks added.

He also noted that fuel prices will increase demand for fuel-efficient compact and mid-size cars with prices expected to rise by 2.7% and 2.1%, respectively, by the end of 2012.

The NADA Used Car Guide predicts prices for large SUVs will also increase, by 1.4%, mostly due to the drop in supply, which will more than offset the elevated price of fuel.

 

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