Tuesday, September 20, 2011

Consumer Alert: Why Used Car Prices Are Rising


1. Dealer used vehicle sales increased in August. After a very strong July, dealers posted another increase in used vehicle sales in August, according to CNW Marketing Research. Dealer used vehicle sales were up 3% in August from their year-ago level, which resulted in a year-to-date gain of 6%. Manufacturer certified pre-owned sales remain on pace to set a record, driving up prices. This is all due to a shortage of available used vehicles as a result of new-vehicle sales falling over the past few years.

2. Pricing differences between segments (compact, midsize, luxury, pick up, SUVs/CUVs, vans) continue to even out. Compact and midsize cars have the largest year-over-year price gains, while pickup trucks, fullsize vans and some crossovers/SUV prices continue to dip, as consumers move toward fuel-efficient vehicles.

3. Off-rental volumes rise, and auction pricing remains strong due to new-vehicle sales being down from two years ago, creating a s shortage of used vehicles. The average price of a rental vehicles being sold at auction remained above the $14,000 mark for the sixth consecutive month in August. Average mileage moved down slightly during the month, but remained above the year-ago level. The volume sold during the month was up from a year ago. So in essence more higher mileage vehicles are showing-up on used car lots at a stronger price than a few years ago.

4. Demand for used vehicles continue to be high since the current recession began in 2008. Many buyers who typically would buy new .... switched to used.

No comments: