It’s been a strange year for the used car market so far. Prices were skewed higher than they normally would be after fewer used cars came in off lease than past years and demand for fuel efficient cars also rose with heightened gas prices.
With gas prices starting to ease and more people looking toward new cars, the prices on used vehicles is declining again. The National Automobile Dealers Association (NADA) says prices are expected to fall 2 percent next month for used cars and 1 percent for trucks.
Those decreases will probably be quite a bit bigger for fuel efficient cars that could command a more inflated price with steadily climbing costs at the pump. The 2011 Toyota Prius and Ford Fusion are both expected to fall 4 percent next month, while the 2009 Toyota Camry is projected to dip 5 percent in price.
Those prices are expected to decline further in the coming months as the market slows down. The high prices seen so far this year are a byproduct of slow auto sales in 2008. At the time, far fewer people were lining up for new cars than might normally be expected. When many of those cars would be getting traded in three years down the line, a proportionally smaller batch of cars came back to roost on used car lots, forcing supply below demand and prices higher then normal.
[Source: LA Times]