Aftermarket Leads: Have You Priced A Used Car Lately?

Aftermarket Leads

January 29, 2012 6:38 pm

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Have You Priced A Used Car Lately?

New car sales in the U.S. had crashed from more than 17 million a year to below 10 million. It did not faze you. You buy used anyway. Let someone else eat the depreciation. Now the slump is catching up with you, and you will pay through your nose.  

Reports the Milwaukee Wisconsin Journal Sentinel:

"Prices of late-model used cars have soared as the impact of auto production dropping by millions of vehicles has made its way into the pre-owned vehicle market."

Late model 2009 and later used cars are in short supply, because fewer were sold and fewer are traded in. If you said "what recession?" and recklessly bought new while the sky was falling, then you are now rewarded with a lot of money. Jesse Toprak of TrueCar.com explains:

"If you are actually trying to trade in a vehicle and get a new vehicle or simply get rid of what you have, you're going to get some of the highest resale values we have seen in the last several years. Now, if you're simply in need of a new vehicle that's used, then you're probably going to pay more than you would have just a few years ago."

Joe Spina, senior analyst at Edmunds.com says that the average retail price for a three-year old car as of December 2008 was $13,849. By December 2011, that average retail price had jumped to $19,500.

This will probably go on for a while. Toprak predicts:

"It's not really going to get any better for the next two to three years."

So what should you do? Toprak of Truecar tells you to buy new:

"If you look at the purchase from a cost of ownership perspective and not just the purchase price, and if you add in the cost of financing the vehicle, sometimes new cars can actually be even cheaper propositions than a newer used car."

Bruce Belzowski, assistant research scientist at the University of Michigan Transportation Research Institute in Ann Arbor recommends to buy older:

"If you are willing to go back to '07 or '08, there should be a lot of those."

Even then, the prices will probably be up.

 

Read the rest here:
Have You Priced A Used Car Lately?