Used Car Prices Remain High
Used-car pricing, both retail and wholesale, have rebounded from the dire levels that started 2009.
Jonathan Banks, senior director of editorial and data services for NADA Used Car Guide, reported that all used-vehicle segments posted double-digit percentage increases year-over-year in January, compared to the low points experienced during 2009. He said that values on most segments are in line or above pre-recessionary levels.
Looking ahead, Banks said the economic fundamentals point to a strong used-car market in 2010.
"Used-vehicle supply, even with the expected million-plus increase in trade-ins, will remain relatively low," he said. "Economic fundamentals point to improved demand, and more constraint on new-car production should keep those transaction prices in check. Seasonality effects are expected, but will be muted since used-vehicle prices are positioned relatively high compared to prices during the past five years."
Ricky Beggs, managing editor of Black Book, said wholesale prices have flattened out at a high level since the start of the year.
Beggs said that in the first week of February, 10 car segments were down, but it was the smallest move of the year. And six truck segments were up.
The massive Toyota recall remains a wild card.
Banks said its values are expected to experience above-average deterioration during the next six months and settle in at a lower premium, compared to substitute models with comparable quality.
"In the short-term, there will be a potential lift in competitive prices as dealers migrate towards other options," he said. "This has already been witnessed in the new car side for both retail and fleet sales."
Beggs said media reports of Toyota's residual demise is overrated.
"So far, our data analysis doesn't show hysterical adjustment, but movement very similar to their competing models," Beggs said.
Some competitors saw prices drop worse than Camry since the recall was announced.
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