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Uptick in Used Car Prices a Temporary Trend

Strong new car sales means increase in trade-ins.

by on Feb.17, 2015

Used car prices are expected to fall in 2015 as the new car sales volumes increase.

Used car prices are expected to fall again in 2015, but in spite of that expectation, they’re rising … just in time for tax refund season.

Analysts from NADA Used Car Guide forecasted used vehicle prices to continually rise by 1-1.5% in February, potentially topping out at a 2.5% increase in March.

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“The price bump in the used vehicle market is created by several factors, but one of them has to do with recently filed consumer tax returns,” said Jonathan Banks, NADA Used Car Guide’s executive analyst. (more…)

Rising New Car Sales Driving Down Used Car Prices

After years of high prices, consumers should see numbers drop.

by on Jan.19, 2015

Strong new car sales are expected to drive down the prices of used cars in 2015.

Aside from adding to the coffers of automakers, the robust sales of new cars created an additional side affect: cheaper used cars.

New vehicle sales were about 16.5 million last year, which was an increase of 5.9% over 2013. That trend is expected to continue this year, which puts pressure on those looking to sell used cars, according to analysts from the National Auto Dealers Association.

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“For the first time in 20 years, wholesale auction prices of used vehicles actually increased during December,” according to Jonathan Banks, executive analyst for NADA Used Car Guide. Banks also stated, “The 0.3% increase during the month is significant…since the average price for December the last 10 years has seen a 1.4% drop.” (more…)

Your “New” Used Car May Have Some Serious Safety Problems

Millions of used vehicles, rental cars not repaired despite major recalls.

by on May.14, 2014

Hertz has agreed to support legislation that would require rental vehicles subject to a recall to be repaired before being returned to rent-a-car lots.

(This story has been updated to reflect the major rental companies’ support for a Senate bill that would require vehicles be pulled from their fleets and repaired after a recall.)

When Raechel and Jacqueline Houck’s car suddenly veered out of control, shot across the highway median and into an oncoming tractor trailer, killing the two women, the company that rented them their Chrysler PT Cruiser initially tried to claim the driver, 24-year-old Raechel, might have been either “suicidal or on drugs.”

In fact, the accident was ultimately ruled to have been caused by a known safety defect, the subject of a recall, that wasn’t repaired by Enterprise, one of the nation’s largest rental firms. It took the Houck family six years to win a $15 million verdict in 2010. But the problem has not gone away.

What a Concept!

Despite a promise by Senator Barbara Boxer, a California Democrat, to enact legislation that would force rental companies to pull recalled vehicles from their fleets until they are repaired, a bill named for the two Houck sisters failed to pass in Congress. More recent efforts that would also cover used vehicles on dealer lots, haven’t gone anywhere – though California voters could have a say on such a proposal this year. (more…)

U.S. Motorists Finally Getting a Break on Used Car Prices

Prices come down even as lenders loosen credit.

by on Nov.14, 2013

Used car prices may finally have peaked after several years of at or near-record numbers.

If you’re in the market for a used car you might finally be getting good news.  Not only are prices taking a dip after several years of record increases, but automotive lenders also are loosening up credit.

The U.S. used car market is huge. By various industry estimates, it’s as much as three times larger than the new vehicle market – which would mean nearly 50 million “previously owned” vehicles will be sold for all of 2013 by franchised dealers, used car lots and individuals. The problem is that the supply dried up during the years following the American economic collapse because with fewer two, three and four-year-old vehicles ready for trade-in, demand outstripped supply.

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Now, however, with the new car market heating back up, there are more cars coming off-lease, in particular.  And a bigger supply normally translates into reduced prices.  According to data tracking site, the typical used vehicle sold for $15,617 during the third quarter of this year.  That was down a sizable 2.8% from the second quarter and, perhaps more significantly, a 0.9% decline from year-earlier prices.


Tax Season A Blessing for Auto Industry

Refunds finance surge in sales.

by on Apr.11, 2013

Auto showrooms - especially used car outlets - are especially busy at tax refund time this year.

While you may be scraping together the cash needed to cover the tax bill due by next week, millions of other Americans have been claiming or already receiving big refund checks – and that’s good news for automakers and auto dealers.

While there are no hard statistics that indicate precisely how many taxpayers take their refund checks over to the local showroom, industry experts say that’s helped fuel strong sales of both new and used vehicles in recent weeks, though the surge will likely soon wind down.

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The year began a little more slowly than Ricky Beggs, senior editor of the used car pricing guide, The Black Book, had expected, but began to surge in March and he says, “I think this has been tax-driven.”


Superstorm Sandy Could Impact Unsuspecting Used Car Buyers.

How to avoid a flood-damaged car – and what to do if it’s yours.

by on Oct.30, 2012

Could some of these flooded cars wind up back on the market?

It could be days, even weeks, before the storm-battered Eastern Seaboard dries out.  Brutal winds and extensive flooding, from Maine to the Carolinas, has wrecked homes and businesses, and left millions without power, even the New York subway system forced to close.

The destruction is likely to include thousands of vehicles damaged or destroyed by floodwater. In some cases, vehicles can be repaired. But many will have suffered extensive, irreparable damage and should be scrapped.  That doesn’t mean they will be.

If recent history is any indication, a number of seriously flood-damaged vehicles will wind up on used car lots and sold to unsuspecting consumers. Experts say half of the vehicles damaged or destroyed by Hurricane Floyd were put back on the road.

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“A car that’s been in a flood, with the engine submerged for any length of time, will never be the same,” said Carl Sullivan, who has nearly two decades of experience inspecting vehicles for AiM, a California-based team of auto inspectors.  “It’s important for used car shoppers to know how to spot flood damage no matter where they live, because these cars can end up on a dealer lot anywhere in the country.”


Owners Waiting Longer than Ever to Trade In

10 years, 150,000 miles the new norm?

by on Jul.30, 2012

Drive it til it drops?

American motorists are waiting longer than ever to trade in their cars, trucks and crossovers – with 10 years and 150,000 miles becoming the new norm, rather than the exception, according to a pair of new reports.

In the golden era of planned obsolescence, it became common for American new car buyers to trade in as often as every two to three years.  Perhaps that was no surprise in an era when quality and reliability were secondary to styling and automotive one-upsmanship.  But as quality and reliability become essential requirements for automakers consumers can be comfortable a car will last longer – something that has become a requirement as prices rise and the economy falters, analysts suggest.

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Nearly eight in 10 owners will now hold their vehicle for a decade or longer before trading in, according to a survey by, while a Black Book survey finds that the majority of owners will not trade in until their vehicles have at least 125,00 to 150,000 miles on the odometer – with 200,000-mile trade-ins being anything but rare these days.


Your 15 Used Car Best Bets

Good news: prices may finally be coming down on “previously owned” vehicles.

by on Jun.22, 2012

The 2010 Toyota Prius; one of 15 Used Car Best Bets.

It’s not been a great year for used car buyers.  Prices have been soaring because of inventory shortages – in large part because with fewer new cars sold during the recession there are now fewer new cars entering the “previously owned” vehicle market.

The good news is that inventories are once again rising – which means used car prices are beginning to fall, according to a new report by the Black Book, a used car pricing and tracking service.  In the meantime, vehicle quality is reaching an all-time, something true for both used cars and new.

The Last Word!

So, the question is which are the best used car to buy?  The folks at Edmunds, an automotive data tracking and testing service, have complied a list of 15 best bets.  This isn’t just a beauty contest.  The selections were based on criteria including reliability, safety, value and, yes, availability.  It wouldn’t help to pick a product consumers can’t find.  The list was limited to vehicles now between two and seven years old.


Americans Keeping Cars Longer Than Ever

But that could depress new car sales.

by on Feb.21, 2012

Gotta make the old jalopy run just a little bit longer.

Credit better quality – or blame a bad economy, if you prefer – what’s hard to disagree with is that Americans are keeping their cars longer, according to a new report by automotive research firm R.L. Polk.

The typical owner will hold onto their new car, truck or crossover for just less than six years, according to the report.  For those who purchased a previously-owned vehicle, the typical length of ownership is just over four years.  That works out to an average, for both new and used vehicles, of 57 months, a figure that has increased 23% since the third quarter of 2008.

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On the downside, longer ownership cycles translate into fewer cars sold.  The flipside is that this could be translating into a significant bubble of pent-up demand that could fuel a surge in sales over the next several years.  Indeed, dealers suggest they’ve already begun seeing many buyers return to their showrooms in recent months as the economy has begun to improve.


Expect to Pay More for Your Next Used Car

But trade-ins will be higher, as well.

by on Feb.07, 2012

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.