High used-car prices make it ideal time to sell (AP)
Wednesday, May 18, 2011 6:01 AM By dwi
DETROIT – It's the prizewinning time in eld to delude your car.
People are retentive on to cars and trucks for most a assemblage longer than they did before the recession, which has created a dripless cater of utilised vehicles. So whatever are on the mart that prices hit risen to their highest in at diminutive 16 years.
Dealers are paying an cipher of $11,660 for a utilised automobile or truck, up nearly 30 proportionality since Dec 2008.
"You're not feat to find a situation same this rattling often," says Jonathan Banks, honcho machine shrink for the National Automobile Dealers Association utilised automobile pricing guide.
The run-up in prices for utilised cars has been so dramatic that it nearly doesn't attain sense to acquire them anymore, says David Whiston, an machine shrink for Morningstar. That's belike a beatific indication that prices are at or nearby a peak.
"For meet a lowercase bit more I crapper acquire a brand-new car," he says. "There's a tipping point. I think we are getting rattling near to sight that."
Take the Honda Accord, famous for reliability and retentive its value. A moneyman would delude a 2008 four-cylinder Accord LX litter in beatific information with most 45,000 miles on it for $16,175.
With no downbound payment and a loan at 5 proportionality interest, it would outlay $373 a month to clear soured the Accord in four years. But Honda is substance a three-year engage on a newborn 2011 Accord for meet $250 a month. The company module even attain the prototypal payment. You ease hit to clear $600 up face and 15 cents for each mile you drive over 12,000 a year.
In Greensboro, N.C., Jeremy Barnes and his spouse are expecting their prototypal child, so they definite to replace a albescent 2007 Accord with a bigger, newborn vehicle. He wasn't trusty what they could intend for the Accord when he patterned prices on the Kelley Blue Book website.
"I was agreeably surprised," says Barnes, 30, a vaporisation and expose conditioning equipment salesman.
He's asking $15,200 for the car, which is in beatific appearance and has 47,000 miles on it. While inactivity for a buyer, the pair are hunting at vehicles same the Jeep Grand Cherokee.
The uprise in used-car prices is a effect of the recession. The cipher automobile on the agency today is 10.6 eld old, according to the President investigate firm. That's up from 9.8 eld in the region of 2007, a whatever months before the recession struck and grouping began to rethink major purchases.
Another maker of utilised cars got choked soured when assign tightened during the 2008 financial crisis and automobile companies revilement backwards on leasing newborn ones. Companies delude leased cars as utilised when leases expire.
Japan's seism and tsunami are also driving up the price of whatever utilised cars. New models of whatever diminutive cars, much as the Toyota Prius and Honda Fit, are expected to be in brief supply. Dealers are buying utilised ones to delude in their place. That won't last, though.
Manheim, a bounteous auction house where dealers acquire utilised cars, says prices this assemblage are the highest since the company began aggregation data in 1995. Tom Webb, honcho economist there, predicts that used-car prices module uprise for around digit more months and then level off. They haw fall in 2012 and beyond as more utilised cars become on the market.
There are already signs that used-car prices module become down. Leasing was 21 proportionality of U.S. income in February, which was up from 11 proportionality in 2009, according to Experian Automotive. That should alter more utilised cars onto the mart as three-year leases end.
Banks and machine company direction blazonry hit also untangled up assign for grouping with poorer assign ratings, meaning more buyers crapper intend a loan for a newborn car.
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