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.
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.