Used Car Prices Increase Sharply
Average price of used cars appreciated nearly $8,000 from 2008
Many car shoppers feel slighted when they are offered a price for their trade in at the dealership. According to Kelly Blue Book, customers seeking a trade-in offer may now have something to smile about. Since 2008, the average value for a one to three year old used vehicle has risen 16% per year. A one to three year old used car in 2008 was worth an average of $15,000; in 2011 it would fetch around $23,000.
Industry analysts point to reduced car sales and leases as a major factor in used car supplies nationwide. It will likely be several years of strong new-car sales before the used car market returns to normal. While this is good news for people looking to trade in a vehicle for something newer, more economical shoppers will find the shortage discouraging. There is not only a much smaller selection of quality used and certified pre owned (CPO) vehicles, but the price is much higher.
"While the pace of used-car appreciation is likely to subside as supply, and ultimately sales, improve, we expect used-vehicle values to remain strong for the next two to three years," said Alec Gutierrez, manager of vehicle valuation for Kelley Blue Book. "While depreciation typically affects a vehicle's value most in the first two years of ownership, it will not be as pronounced as it would have been a few years ago when the used-car supply was still very high. Consumers who plan to sell or trade-in a used car soon will likely see their vehicle hold its value well. Alternatively, shoppers in the market for a used car will continue to pay more, making it difficult to buy at a discount."
Shoppers interested in their own car's current value can also visit the Autotrader.com Trade-In Marketplace. The interactive website makes it easy for shoppers to get a guaranteed price for their car by answering a few easy questions. Once the shopper completes the information form, their vehicle is given a value and the shopper receives several offers from local dealers. The dealers guarantee to honor the trade-in or walk-away sale price, after a brief test drive.