The three year old car in your garage may not seem thrilling anymore, but some car dealers would think otherwise.
Car owners with well-maintained cars have an opportunity to take advantage of what industry analysts say is a record peak for used-car prices. The resale and trade-in values of used cars and late-model vehicles have been continuously rising due to demand exceeding supply, especially for fuel-efficient models.
Among the reasons for the increase in used-car values is the shortage of popular Japanese models. This is mainly due to production slowdowns following the earthquake last March. The sales collapse during the 2008 and 2009 financial crisis resulted to fewer two and three year old car models.
Last week, the National Automobile Dealers Association (NADA) raised values again on many small- and medium-size cars. The resale value of a one-year old Honda Civic was at $ 14, 275 last May. This month, the same car model’s value is at $ 15, 950.
Kelley Blue Book, the largest automotive vehicle valuation company in the US, said that a three-year old Toyota Prius now has a resale value of $ 17,750, which is $ 6,050 higher than the value of a three-year old Toyota Prius a year ago.
However, the market for large sport utility vehicles do not share the same fate. The resale value of car models like Ford Expedition and Chevrolet Tahoe are down by 1% from a year ago, according to NADA.
Mid-size luxury cars like the Mercedes E-Class and the BMW 5-series are worth about 6% more than a year ago.
Japanese car makers are making an effort to ramp up production which means that brand new cars will probably be out pretty soon. And there’s an even bigger chance that these models will be distributed at discount deals to help the manufacturers get back the market share they lost. Analysts predict that when cheaper new cars make an appearance in the market, the prices of used-cars will moderate as well.
carsonoverdrive 