Autoshopper.com, an online listing site for used vehicles, says it’s seeing the same price trend at retail, especially for smaller used cars. “ The average price of all used Honda Civics listed on this site is up 2.9% from October, it seems like since the
(PRWEB) November 26, 2011
Autoshopper.com - an online listing site for used vehicles says, Economy Falls and Used Car Prices Go Up. Buyers Ready to Jump at Used Cars over New Cars.Used Car salesmen are getting more business than new car salesman, these days, because the demand for used cars is in top demand. That is good and bad news for the car business because the demand has driven up the used car prices at the auctions, therefor; the gross profit has hit a sharp decline.
While new car sales fall, many dealers are finding that a lot of people are willing to jump at a good used car deal instead of a new car deal.
Autoshopper.com, an online listing site for used vehicles, says it’s seeing the same price trend at retail, especially for smaller used cars. “The average price of all used Honda Civics listed on this site is up 2.9% from October, it seems like since the economy has fallen the used car prices has risen,” spokesman Dani Lunsford, Director of Marketing for Showcase Publications, Inc.
The number of used car sales sold through dealers rose 3.1% in February compared to last years; it’s the first year-over-year increase in 12 months, “According to CNW Market Research.” By contrast, new car sales fell 41.1% in February from a year ago.
Wholesale used cars have been gaining since October, including 1.1% rise says Tom Konotos, chief economist for Adesa Analytical Services, though they remain lower than in February 2008.
“People are trying to be a bit more responsible in their major purchase,” Konotos says, making used cars more attractive. It’s “another sign of prudence.”
AutoNation is seeing gains in sales of “Certified” cars, the newest pre owned cars that are checked out and come with a warranty. Sales were up 15% last year and they are “single digits” this year, Maroone says. The program is being spurred, as well as by 2.9% loan rates offered by General Motors certified used vehicles including buyers with imperfect credit.
Toyota just begin a certified program for used hybrids which will get a more thorough and specific inspection of the drive trains.
The acquisition of buying a car boils down to necessity, scarcity and desperation.
Necessity - A used car is more of an economical alternative if your current car breaks down. “There are people who need vehicles” says Mike Maroone, president of AutoNation, the largest dealer chain.
Scarcity - Rental car agencies are a top source for late model used cars, they are holding on to every one of their cars longer just to save cash. And poor new car sales also cut supply, “Dealers aren’t getting any trade-ins” says Tom Webb, chief economist for Manheim Consulting. As a consequence “they are bidding up prices at auctions” to have used cars to sell.
Desperation - Dealers can buy any used car they think will sell fast, but with the sharp decline in gross profits, they are getting desperate, to try and take a risk on higher mileage, older used cars. On the down side, with new cars, they often have to take automakers slow sellers if they want more of new hottest models on their lot.