Used-Car Prices Hang In There At High Levels

Used-car prices on average hit a record of $18,800 per vehicle in the second quarter, an eye-opening increase of $1,300 per vehicle on average from a year earlier, according to auto shopping and industry analysis web site Edmunds.com, in its latest Used Vehicle Market Report.
That’s important whether you’re in the market for a new or a used car or truck. Rising used-car prices imply rising new-car prices, too.
At a basic level, consumer demand is high. U.S. new-vehicle sales are expected to hit a near-record 17.2 million in 2015, and maybe set a new record in 2016, at around 17.5 million, according to the National Automobile Dealers Association.
Beyond the basics, today’s used-car market gets complicated. To a great extent, the U.S. auto market is still reacting to the sickening drop in new-car sales in the Great Recession.

U.S. auto sales bottomed out in 2009, the year that General Motors and the then-Chrysler Group went through bankruptcy restructuring. Ford avoided bankruptcy, but all three companies downsized. Familiar brands like Pontiac, Saturn, and Mercury got kicked to the curb.

New-car sales in 2009 were only 10.4 million. Analysts said that was the lowest point for U.S. auto sales per capita since World War II. That was nearly 3 million units below 2008, and 2008 was nearly 3 million units lower than 2007.
That drop in new-car sales meant the exact same size drop in used-car inventory, since after all, today’s new cars are tomorrow’s used cars.

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