Used Car Prices Are Falling for the First Time in Years

Used Car Prices Are Falling for the First Time in Years Photo (cc) by Foot Slogger

This could be the year to buy a new car — a new used car, that is.

Used car prices are expected to drop 5 to 6 percent in 2016, according to the National Automobile Dealers Association, which publishes the NADA Used Car Guide.

Jonathan Banks, executive automotive analyst for the NADA Used Car Guide, recently told CNBC that the drop in used car prices is the result of autos leased in 2013 returning to the market.

That represents an increase of about 800,000 leased cars returning to the market in 2016 compared with 2015.

Banks explains:

“The primary driver for this decline is the resurgence of used supply. So basically, 2016 marks the first year where we have a material increase in used supply.”

The NADA used car price index has been at historic highs in recent years, Banks says, following lows in 2008 through 2011.

Another driver for the decline in used car prices is strong sales of new cars over the past few years. Those new cars are also returning to the market as used cars. Banks says incentives for new vehicles average $3,500, or $5,000 for lease purchases.

The Detroit Free Press also reported late last week that a similar trend in used car prices has been seen at wholesale auctions where dealers purchase cars.

Michelle Krebs, a Detroit-based senior analyst for Autotrader, tells the newspaper:

“This is good news for used car shoppers. Prices are falling. The selection is varied and abundant. …

Bargain shoppers can find some of the best deals in the small car category that includes models like Honda Civic, Toyota Corolla and Ford Focus. Midsize cars, which also saw some drop, are a good deal as well.”

If you’re considering a used vehicle, be sure to first check out “6 Things You Should Check Before Buying a Used Car.”

If you’re in the market for a car loan or already have one, be sure you aren’t paying too much in interest.

What do you make of the rising number of used cars? Share your thoughts below or on our Facebook page.

Popular Articles

6 Tips to Age-Proof Your Resume
6 Tips to Age-Proof Your Resume

Finding a job isn’t easy — and it sometimes feels like too much experience actually counts against you. These tips will help.

How All 50 States Tax Your Retirement Income
How All 50 States Tax Your Retirement Income

Find out which states are friendly, and not-so friendly, with the money you’ll need in your later years.

7 Reasons You Should Rent a Home in Retirement
7 Reasons You Should Rent a Home in Retirement

Renting is a better fit than owning for many retirees. Here’s how it can pay off during your golden years.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Comments

930 Active Deals

More Deals