If the high cost of new vehicles has been keeping you from trading in your old clunker, here’s some good news. Late model used cars and trucks are becoming more affordable, especially if you’re in the market for a compact or hybrid model.
Used vehicle prices tend to be higher right after the first of the calendar year as dealers gear up for the spring selling season, and come down in the late spring and summer. Kelley Blue Book senior market analyst Alex Gutierrez says the average price of a 3-year-old car declined by four percent between April and June of this year.
Manheim, one of the nation’s leading wholesale vehicle auction companies, reports that the average price paid for used cars at auctions fell to $11,031 in June, down six percent from the all-time average high which was reached in May 2011. Lower prices paid by dealers at auctions have also resulted in lower prices for consumers purchasing used vehicles from individual sellers.
In 2009, the federal government’s C.A.R.S. program, more commonly known as “cash for clunkers”, took an estimated 690,000 older vehicles off the roads, and drove prices on the remaining inventory of used vehicles so high that it made sense for most consumers to purchase new automobiles. Four years later, the landscape has changed, and consumers looking to purchase a three-year-old used car can save as much as 25 percent to 30 percent compared to buying a new model.
During the last half of 2012, the retail price of the average used car dropped by about $1,000 and most industry experts expect to see prices fall by about the same amount during the second half of this year.
While used car prices have fallen, new car prices have inched up, with the average price of a new vehicle rose by about one percent between April and June, to $31,663. With new car prices on the rise, more and more consumers are considering buying used; which will inevitably drive prices on pre-owned vehicles higher.
If you’re considering purchasing a used vehicle, now may be the best time to act. Here are some things to keep in mind as you begin shopping.
The best place to begin your search is online. Comparative shopping online can save you time and money and can give you a good idea of what various used vehicles are selling for in your specific market.
According to Kelley Blue Book, the national average price for a three-year-old small car was $13,000 last month. The average three-year-old midsize sold for $14,503, and you could expect to pay $28,692 for the average used luxury model.
The average price paid for a used midsize SUV in June fell to $20,581 and the average price for a three-year-old compact SUV dropped to $17,548.
Prices for used full-size pickup trucks was unchanged between April and June – a sign that the economy is improving. The average used full-size pickup sold for $21,854, while the price of the average small pickup fell to $17,119.