Thanks primarily to the glut of off-lease cars pouring into the marketplace, used car prices posted healthy declines in 2017. And that trend won’t end anytime soon — used cars will remain a relative bargain into the new year.
Making pre-owned cars even more appealing in 2017 was a steady escalation in the average transaction price (ATP) for light vehicles. Light vehicles include cars, pickups, SUVs and so forth. According to Kelly Blue Book (KBB), a sister company of Autotrader, the new car ATP in December of 2017 was $36,113. That’s up $583, or 1.6 percent, from the same month in 2016. It also represented a 0.2 percent increase over the previous month.
With December’s increase in the new car ATP, the overall ATP for 2017 was up 2 percent from 2016. This was a slightly slower growth than the 2.5 percent ATP from 2015 to 2016. "Average transaction prices closed the year on a strong note, rising nearly 2 percent in December 2017 to set a record high," said Tim Fleming, analyst for Kelley Blue Book.
Despite the unflagging popularity of trucks, SUVs and crossovers, the biggest segment jumps in new car ATP in 2017 were posted by the high-end luxury car segment, at 3.5 percent, and the sports car segment, at 3.1 percent. Volkswagen was the big winner among brands, with an 8.1 percent ATP year-over-year gain. Toyota had the second-largest ATP improvement, at 2.7 percent.
Used cars should continue to be a good deal, at least in the short term.