Used vehicle demand up, supply down; prices soar

[alienlovechild 75]

Used car prices are climbing and the pool of available models is drying up one year after the federal "cash for clunkers" program spurred consumers to scrap old cars for new ones.

Used cars are selling for the highest average price in at least seven years, according to Edmunds.com, an online auto consumer guide. Last month, the average price of a three-year-old vehicle spiked 10.3 percent, to $19,248, compared to July 2009.

Supply is down because "cash for clunkers" required old vehicles to be destroyed, rather than allowing them to be resold. In addition, fewer leased vehicles are being turned in and available for sale because automakers all but abandoned leasing during the industry collapse of 2008 and 2009.

Demand, meanwhile, is up as some cautious consumers choose to buy used cars, rather than expensive new ones.

Prices have climbed so fast that banks are slow to recognize higher book values for some used vehicles, which complicates the financing process when consumers try to trade in used models and buy new ones, dealers say. That means larger down payments when buyers try to trade in, for example, a used car that may now be worth $10,000 but the bank still values at $9,300. "It's not fun," said George Fowler, general manager of Superior Buick GMC in Dearborn. "We're losing deals when people can't get financed because they can't get close to the book value on their trade-in."

Some analysts see a fluctuating trend in used car prices since "cash for clunkers," the government's $3 billion program that helped sell 677,000 vehicles. Used car prices increased in the months following the end of the program before falling in late 2009. But prices rebounded early this year, amid high unemployment and continued low consumer confidence, Gutierrez said.

The vehicle shortage is forcing dealers to extreme measures -- such as combing online classifieds site Craigslist.com and eBay -- to find used cars to meet demands of customers.

Brittany Chisolm and her grandmother, Bertha Chisolm, had trouble sticking to their budget when they went to the Greater Detroit Auto Auction in Brownstown Township last week. Going in, the Detroiters wanted to spend no more than $2,000 on Brittany's first car, which she needed before starting classes at Wayne State University.

But they were forced to blow the budget by about $700 to win the bidding on a 1999 Pontiac Grand Am.

Prices for some types of used vehicles are climbing faster than others, mirroring trends in consumer tastes and lower gas prices. Certain models of sport utility vehicles, crossovers and minivans -- including the Cadillac Escalade, Chevrolet Suburban, Dodge Grand Caravan, BMW X5 and Acura MDX -- were up almost 30 percent or more in July, compared to a year earlier, according to Edmunds.com.

The price tags on compact SUVs were up 14.4 percent while prices in the luxury segment increased 16 percent. Midsize cars, meanwhile, rose a modest 2.3 percent.

Auctioneer Mike Maltese said, on average, the price of a used car that once sold for $2,000 is up 40 percent and a $3,000 car is now selling at auction for $4,000.Generally speaking, used vehicles coming up for sale now have higher mileage than in previous years, presenting buyers with a new reality, Maltese said.

"In the past, if a car had 92,000 miles on it, you'd say it only has 8,000 miles left on it," said Maltese, 56. "Now, anything under 100,000 miles is gold."

http://www.detnews.com/article/20100830/AUTO01/8300337/Used-vehicle-demand-up--supply-down--prices-soar

[Danno 1,228]

That reminded me to re-list my car on Craigslist!

[alienlovechild 75]

That reminded me to re-list my car on Craigslist!

Just the opposite for me. I was thinking about buying my wife a car but now I think I'll postpone that purchase for a few more months.

[luckytxn 2,264]

Makes my great deals I got when I bought two new cars during that bust look even better.

[Ken y Leidys 20]

Jeeps typically command a high resale. I decided to buy a new Rubicon 7 years ago, and I'll stick by this Jeep since who has $30,000.00+ for an Unlimited Rubicon?? Here's my hunk of rusting, depreciating American asset.

[Ban Hammer 13,403]

Here's my hunk of rusting, depreciating American asset.

speaking of rusting, depreciating american metal - here's spooky and his mechanical sheep.

from 0-60 contractions in under 3 seconds.

[trillium13 84]

Anybody wanna buy an '05 Toyota Matrix? It only just got recalled.