Used Car Prices Are Softening, but It's Not Just from Off-Lease | Au

Used <b>Car Prices</b> Are Softening, but It&#39;s Not Just from Off-Lease | Au

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Used <b>Car Prices</b> Are Softening, but It&#39;s Not Just from Off-Lease | Au Posted: 29 Apr 2014 02:55 PM PDT Yes, lower used car prices are just around the cor­ner; and no, it's not just about off-lease units see­ing big vol­ume increases. Experts like NADA Used Car Guide ana­lyst Larry Dixon and Black Book's Ricky Beggssee price declines, with much of it com­ing from sea­sonal pat­terns – and from what hap­pens his­tor­i­cally when used car prices sky­rocket to abnor­mal lev­els. Now, they're com­ing down to get back in line, Dixon said. As April closes, Dixon expects eight-year-old and newer vehi­cles will see a 2% price drop from March lev­els – and that should fall another 3% in May. It does tend to hap­pen – "When see [the prices] rise dra­mat­i­cally, they tend to fall dra­mat­i­cally," he said. "We've seen this cycle before." Beggs saw that used-vehicle prices remained strong in April, but Black Book research has been indi­cat­ing that by mid-April, deal­ers were bid­ding less aggres­sively. Mid-size and com­pact cars took the biggest hit. Pickup trucks are retain­ing their value and that should con­tinue with all the demand com­ing from hous­ing and construction. Dixon does acknowl­edge that the pre­dicted down­ward price trend is here, and that March was unex­pect­edly high due to pent up demand fol­low­ing the harsh weather con­di­tions of Jan­u­ary and Feb­ru­ary. He cites tight used-vehicle sup­ply com­ing from car rental com­pa­nies hold­ing their cars longer than usual to sat­isfy replace­ment car demand fol­low­ing weather-related acci­dents and to meet demand gen­er­ated by mas­sive vehi­cle recalls. Auc­tion vol­ume was down 4% in March – that was sur­pris­ing to Dixon given the growth in off-lease vehi­cles. He thinks that auc­tion vol­ume was thrown off by deal­ers pur­chas­ing many of these units from lessors before they arrived at auc­tions. But pay atten­tion to off-lease vehi­cles – it is grow­ing. "Its tra­jec­tory is up, not down," Dixon said. 2014 Automotive Information Network, Inc. All Rights Reserved.

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