According to a new report from Edmunds.com, used sports utility vehicles and crossovers are selling for 30% more at retail than they did in 2009. While prices for used vehicles of all types remain high, they retreated again last month from the record high levels they reached last spring.
The Edmunds survey found that the average retail price being paid for a used Cadillac Escalade luxury SUV last month had increased 36%, compared with July 2009, to $34,715. The average retail price for a used Dodge Grand Caravan in July was up 34% compared with the same month in 2009, to $15,629. The survey averaged prices across all model years.
Edmunds.com senior analyst Joe Spina said the increase in prices for used vehicles is a result of consumer’s lack of confidence in the overall U.S. economy. As more consumers opt for used, rather than new vehicles, the higher demand, combined with the already depleted supply of used cars and trucks continues to place upward pressure on prices.
Spina said, “This time last year, consumers were buying fuel-efficient vehicles and trading so-called gas guzzlers. Now, those who need trucks and large SUVs are buying them, but the inventory is low because there is a current shortage of lease returns and trade-ins of this vehicle type.”
The federal government’s Cash for Clunkers program is also having a long-term effect on used vehicle prices by creating what some are calling artificially low inventories. According to one estimate, the program removed approximately 600,000 vehicles from the national used vehicle inventory.
“Prices are indeed very high now,” said Spina. “While this is the case, last year’s prices were low, making the gains even more dramatic.”
Although retail prices for used vehicles may have increased in July, data from both ADSEA Incorporated and Manheim, show a decline in wholesale prices for used vehicles compared with last spring’s levels.
According to Automotive Dealer Exchange Services of America (ADESA) and Manheim, wholesale prices for used vehicles fell in July compared with last spring. ADESA reports that the average wholesale price for a used vehicle fell to $10,060 in July, down 2% from June and 1% lower than the average price a year ago.
In July, Manheim’s monthly Used Vehicle Value Index was at 118.9, down from 120.2 in June. However, the July index was up from its July 2009 level of 115.4.
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