Prices for used cars are accelerating, according to a report from the country's car salespeople.
Used-car prices are now at a 16-year high, according to the National Automotive Dealers Association (NADA), which tracks used-car prices. Correlating to the high price of gas, demand for small and mid-sized vehicles is surging, according to Jonathan Banks, Executive Auto Analyst at NADA.
In fact, the NADA says the current demand for used cars mirrors the situation in 2008, during which the price of gas rose to $4.10 a gallon. In May alone, the NADA’s suggested prices for used small vehicles climbed by 10 percent.
Inventory shortages from the Japanese earthquake and increased demand for fuel-efficient cars have pushed the price of a Honda Accord to record levels, according to Banks. Other used cars, such as the Toyota Prius, the Chevrolet Aveo LS sedan, the Hyundai Accent GLS have risen between 11 and 14 percent. From May to June, for instance, NADA’s price on a 2007 Toyota Prius jumped up $1,950 from May – a 15-percent increase in one month.
Used-car sales and prices typically peak in March. This year, the market will peak in June, predicted Banks. In response to demand, dealers have been purchasing used fuel-efficient vehicles at auction and even from private sales. In the summer months, new-car inventories are typically lower so dealers anticipate demand for used cars will hold steady until new-car inventories catch up.
As gas prices drop, however, the used-car market bubble will run out of fuel, cautions Alec Gutierrez, Manager of Vehicle Valuation at Kelley Blue Book, which also tracks used-car prices.