Used-Car Prices See ‘Slight’ Drop This Month; Declines Expected to Continue
As supply loosens and the industry looks forward to the promise of more off-lease supply this year and beyond, downward pressure to used-car prices may change the prices on the lots a bit this spring.
An entry in Cars.com’s "Kicking Tires" blog indicated that late-model used-car prices saw a "very slight" decline in March, with the average asking price in Cars.com vehicle listings down by $31, as it came in at $22,619.
"Prices for 2010 to 2012 used cars are down just $43 from the beginning of the year, or less than 1 percent," reads the blog post, which was authored by Mike Hanley of Cars.com.
Interestingly, some of the top 10 cars with the biggest price changes experienced price corrections this month.
For example, after experiencing the biggest price gains in February, the BMW X5 and Subaru Impreza had the largest price declines in March on Cars.com listing.
Specifically, X5 prices were down 9 percent to $44,901, while Impreza prices fell 6 percent to $21,918.
"The decreases erased all of the prior month's gains for these models — and then some," the blog reads, going on to note that perhaps these all-wheel-drive vehicles were priced higher for winter, which would explain this month’s price correction.
On the other hand, the the Chevrolet Express 3500 saw the largest percentage drop in February but recovered much of its price decreases in March.
Specifically, this unit’s average price increased 8 percent to $23,470.
"The only model that saw a bigger price increase was the GMC Canyon pickup truck; its average asking price jumped $4,509 to $26,335, a 21 percent gain," the entry reads.
To read more about price changes on the used lots this month, see the Cars.com blog post here.
Looking at other analyses throughout the industry, it appears the used-price declines may have just begun.
Used-car prices are likely to soften some this year, according to the latest RVI Risk Outlook, and it appears this trend will not stop anytime soon. In fact, it seems this decline will accelerate.
After an anticipated 0.2-percent year-over-year downturn in the RVI Used Car Price Index for 2013, the firm is projecting used-car prices to soften through 2018 as used supply begins to loosen.
"In 2014, used-car supply will begin to increase, putting downward pressure on used-car price," officials said. "This, along with softening new-car prices and strengthening new car demand, will cause a downward trend on used-car prices through 2018."
More specifically, RVI Used Car Price Index is projected to fall 0.6 percent year-over-year in 2014, 2.0 percent in 2015, 1.9 percent in 2016, 0.7 percent in 2017 and 0.4 percent in 2018.
To read more on used-price trends, see the Auto Remarketing story here.
Sarah Rubenoff can be reached at srubenoff@autoremarketing.com. Continue the conversation with Auto Remarketing on both LinkedIn and Twitter.