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.

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