Used-car price increases are accelerating as a little scuff on the tires becomes a sought-after commodity in a tough economic climate.
Lacking buyer incentives that come with the latest models, used cars increasingly can cost more than a new one. Ford, Toyota, Nissan, Honda and others that rode solid, but not spectacular, September sales look to benefit as secondhand sticker prices surge. The average price paid for a three-year-old used car has spiked 8.5%, to $18,832, since last September, according to figures from Edmunds. The percentage of those cars being sold rose as well, with 18.5% of all used cars sold at dealerships being three years old or younger, compared with 13.5% last year.
The prices of used cars are up. The price of a three-year-old BMW X5 increased 27.7% since this time in September 2009, to the $39,185 average price it fetched last month.
Those increased come as the Manheim Used Vehicle Index indicated a 0.3% increase in September used-car prices from the same period last year. Used-car sales volume has increased 4.7% year-to-date, with the average mileage on decommissioned rental cars declining 11% since September of last year. This puts lightly used cars at a premium, with the price of a three-year-old BMW X5 increasing 27.7% from September 2009 to the $39,185 average price it fetched last month. The Acura MDX also saw its secondary-market value surge, with resellers getting an average of $29,428 last month, or 25.9% more than what was offered a year ago.
Though the luxury sector has seen average prices soar from $20,376 last September to $23,146 last month, it’s not the only category pushing the needle forward. Sticker prices have surged for a used Chevrolet Tahoe (24.2%), Toyota Tundra (17%), Nissan Titan (9.4%) and Ford Focus (8.6%) as the average price of used large SUVs rose to $25,013 from $18,963, used full-sized pickup trucks leaped to $20,652 last month from $18,886, and compact cars appreciated to $10,775 from $10,232. Manheim reported a 6.1% increase in overall used pickup prices, a 2.5% uptick for SUVs and a whopping 8% price hike for used vans.
Automakers love this, as new cars begin to look like a better value by comparison. In some cases, according to Edmunds, a new vehicle is the cheaper alternative to its used counterpart. The typical monthly payment for a new Audi S4, for example, is $793. That same payment for a used model is $860, which will cost its owner $4,020 more over the life of a payment plan than a new model. The same can be said for the Honda CRV SUV, which costs $425 a month new, $444 a month used and takes an extra $1,140 from used-car owners for the privilege. The Toyota Tundra’s payments, meanwhile, save buyers $1,320 when they buy one new instead of used. As supplies of these used cars keep shrinking and their prices inflate, consumers’ common sense about used cars’ value and savings may be thrown into reverse.