Shopping for a car? Used <b>auto prices</b> take a tumble - CNBC.com |
| Shopping for a car? Used <b>auto prices</b> take a tumble - CNBC.com Posted: 15 Aug 2014 10:40 AM PDT  Patrick T. Fallon | Bloomberg | Getty Images Customers shop for used vehicles at a CarMax in Burbank, Calif. There are a few exceptions, such as pickup trucks, which have been in increasingly high demand as contractors and fleets rebound along with the economy. But there are deals to be had on "nearly new" luxury cars and a number of other models, according to Tom Webb, chief economist for Manheim, which runs used vehicle wholesale auctions. Read MoreHow millennials are reshaping the car buying process He said a typical midsize sedan that might have cost $15,000 in June was going for about 2 percent less in July, or around $14,700. The Black Book, which tracks vehicle values for dealers, estimates that values at the dealer level slumped from an average $22,863 in August 2013 to $20,463 by July this year, an 11.8 percent decline. More from The Detroit Bureau: Used car prices took what Webb called an "unprecedented" surge in 2008, hitting an all-time peak three years later and generally holding at above-trend numbers until now. The reason? A lack of supply. But the new car market has rebounded faster than anticipated, so there is a growing supply of used vehicles available, driving down prices. —By CNBC Contributor Paul A. Eisenstein. Follow him on Twitter @DetroitBureau or at thedetroitbureau.com.  |
| Market Forces: New-<b>Car</b> Sales Surge Making Used <b>Cars</b> Cheaper Posted: 07 Aug 2014 02:22 PM PDT It's been a very strong year—a very strong several years, really—for new-car sales. New-vehicle sales continue to be the bull-market bright spot of the economy, with analysts still predicting annual sales headed past 16 million vehicles this year. July sales factored in as the best for the month since 2005, and strong summer sales are pushing predictions higher toward a near-record 17-million rate, unparalleled since the early 2000s. The flip side is that the used-car lot is getting sidelined in this latest market boom. and trade-ins are flooding the market. And the laws of supply and demand are taking over, pulling demand—as well as prices—downward as supply continues to surge. And used cars—especially cars, more than trucks—are getting cheaper. READ: The 17 Most Important New Cars Of 2015 "Accelerating depreciation" for used cars Used vehicles from model years 2009 through 2013 have been going through a period of "accelerating depreciation," as the pricing authority Black Book puts it. Such models have fallen in value by 1.5 percent, on average, just during July, and the company expects overall used-vehicle depreciation for 2014 to be at 13.5 percent—far more pronounced than it's been in recent years. "We anticipate this trend of accelerating depreciation will continue through the rest of the year, with smaller cars and luxury segments seeing higher levels of depreciation," said Ricky Beggs, the editorial director at Black Book. As Black Book notes—citing low fuel prices and incoming 2015 models as factors—eleven of the thirteen strongest-performing segments for the past month include trucks. The other two were Sporty Cars and Premium Sporty Cars. ALSO SEE: 2015 Mercedes-Benz C-Class First Drive Vans, pickups, compact SUVs still strong in the used market Through July, versus last year, the average late-model vehicle in this model-year range has lost nearly 12 percent of its value. Import-brand cars and trucks actually lost more value than domestic-brand cars and trucks. Full-size vans, compact SUVs, and pickups of all sizes are among those with the smallest plunge in price this past year, while many types of cars, SUVs, and crossovers have taken double-digit depreciation. Looking at this past month, mid-size sedans, like the Honda Accord, Toyota Camry, Nissan Altima, and Volkswagen Passat are seeing the steepest depreciation. Among trucks, full-size SUVs have been depreciating at the steepest rate; prices on such models, including the Nissan Armada, Dodge Durango, Chevrolet Suburban, and Ford Expedition, among others, fell by 2.1 percent in July, while the average price of such a vehicle is down eight percent versus the same time a year ago. Market trends aside, there's a clear message here for anyone looking to replace what's in their driveway now: If you can do without that new-car smell, it's a great time to go with a late-model used car or truck. ___________________________________________ |
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