Expect to pay more for that "previously-owned" car in the months ahead.
There’s good news and bad news for used car buyers. On the down side, prices will likely be higher due to strong demand. But that also should translate into better trade-in prices, as well, according to an automotive industry trade group.
The National Automobile Dealers Association is predicting that used car prices will rise again but at a slower pace than in 2011. Those higher used vehicle prices will be the result of Increasing demand and a drop in the supply of previously-owned cars and trucks, said Jonathan Banks, executive automotive analyst with the NADA Used Car Guide.
On the positive side, “Consumers shopping for either a new or used vehicle will benefit this year from higher trade-in values along with loosening credit,” Banks said.
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For dealers, reliance on customer trade-ins will increase as they strive to meet the challenges of growing demand in a supply-constrained market. Dealers are facing a particular struggle coming up with “nearly new” two to four-year-old vehicles due to the downturn in the new car market over the last four years. In particular, there are significantly fewer vehicles coming off-lease as many lenders curtailed their leasing programs during the depths of the Great Recession.