Used Car Pricing Set to Act Like Used Car Pricing Should

[xcel]

Higher residuals and incentives on new vehicles should help keep new automobile sales moving upward.

Wayne Gerdes - CleanMPG - Aug 18, 2012

Used vehicle pricing is headed downward but probably not enough to make purchasing used make sense for some vehicles.

For consumers shopping the used car market, average prices for vehicles up to five-years old experienced the greatest monthly decline this year dropping 3.8% in August according to data released by the NADA Used Car Guide earlier this week.

NADA predicts that used-vehicle prices will drop another 3% to 3.5% in September meaning a used car worth $12,000 today will drop by more than $400 by the end of the third quarter.

Jonathan Banks, senior analyst with the National Automobile Dealers Association (NADA) Used Car Guide:

"Dealers and manufacturers are offering strong incentives and rebates to sell remaining new car inventory which is a seasonal factor that typically results in used car prices to decline this month and next."

Despite the expected price declines of used cars through the remainder of the year, prices are still at historically high levels allowing higher than average trade-in values. This helps the average consumer purchase new. Higher used car pricing also provides more purchasing power for those that want to trade up and while usually $ foolish, it helps grease the automobile economy’s wheels somewhat.

[Airbalancer]

One of the biggest reason the used car price is higher is because for a couple of years GM , Ford and Dodge did not lease, so now cars are not being turned in, therefore less cars on the market

[philmcneal]

that's a a good point! with all the incentives with new cars its tougher to find a smoking deal on the used market

[ALS]

The other issue is the public is keeping their cars longer so finding a nice low mileage unit for a fare price is getting harder and harder.