Used Car Prices May Drop in 2010
Posted: Jan. 05, 2010
Used car prices rose dramatically in 2009, but analysts don't expect that trend to continue. Instead, they predict that used car prices will level off and maybe even decrease this year.
Kicking Tires reports, “Used car prices went up every month in 2009, fueled by a decrease in trade-ins and lower inventories from Cash for Clunkers.” Penny-pinching Americans held onto their cars longer, and the government’s gas-guzzler buy-back program destroyed thousands of cars that would otherwise have entered the used car market. Even rental fleets held onto their cars longer. Those factors restricted supply – used car dealers nationwide had about 8 million fewer cars on their lots in December than they do in a typical year – and pushed prices up.
The trend toward higher used car prices could begin to change soon, as Americans begin buying new cars again. USA Today reports, “An expected 15% rise in new vehicle sales this year could result in a flood of trade-ins, increasing the supply of used cars and helping to ease prices.”
Still, analysts say, things may not return to normal in 2010. Paul Taylor, Chief Economist for the National Automobile Dealers Association, tells USA Today, “We'll start to see an ease to the used car shortage, but it will be several years before the supply returns to the average of the 1998-2007 period of strong new car sales.”
LINK:
Used Car Prices May Drop in 2010 - U.S. News Rankings and Reviews
Linear Mode
