Used Cars for Sale: Kelley Blue Book Tells Shoppers Buy Now or Pay Later
Whether you’re looking for a recent model Chevy Cruze, Toyota Corolla, Dodge Ram truck, or a lightly-used BMW, Kelley Blue Book (KBB), provider of new and used car information, strongly suggests you buy now. They predict prices will rise on used vehicles by as much as 4 to 6 percent in early 2012.
Now, on the other hand, is an excellent time to buy. KBB says that prices on used cars for sale at dealers dropped on average 2.6 percent last month, for the fifth month in a row. Used vehicle prices were at their highest in June and have been falling ever since. The average vehicle price has dropped 10 percent since then, while the price of fuel-efficient vehicles has dropped more than 20 percent. With the 2012s already out, and holiday shopping and expenses on everyone’s mind, there’s not much interest in buying older cars, but the dealers still want to get rid of them.
"Considering the already significant declines in used-car values since June, Kelley Blue Book predicts that values will decline an additional 3 to 4 percent by the end of the year," said Alec Gutierrez, manager of vehicle valuation for Kelley Blue Book. "Used-car values typically decline through the fourth quarter due to a seasonal drop in demand that lasts through the holiday season. We believe sales volume also will decline through the remaining fourth quarter, similar to years past, and as a result values will likely remain soft through year-end, with few exceptions."
Which means if you’re in the market for a used vehicle, buying before year-end makes good sense. Especially since KBB’s analysts expect prices to start rising again in the first quarter of 2012. That will make the used cars for sale today look like a real bargain.
"Since 2009, used-vehicle registrations in the first quarter have increased by 15 to 20 percent on average from the preceding fourth quarter, and since we expect a similar increase in demand in 2012, a lack of supply will likely put upward pressure on values early in the year," said Gutierrez. "Since we expect fewer leases and trade-ins replenishing supply, values will likely increase across the board as supply struggles to keep pace with demand. Values for certain segments can change more aggressively should fuel prices increase similar to earlier this year."
KBB says prices have gone up between 1 to 4 percent in the first quarter since 2009, but they expect 2012’s prices to go higher because of a predicted shortage of supply. So used car buyers at the start of the year will not only be facing higher prices, but fewer vehicles to choose from. Maybe you should put a used car on your holiday gift list.