If you're in the market for a used car, now might be a good time to get serious about shopping. New data, paired with time-honored auto industry trends, could add up to big savings for consumers in the coming weeks.
Last month, we told you that used car prices were slipping. According to the National Association of Automobile Dealers, midsize and compact used cars are up to 2.8% cheaper now than they were in May.
And the deals are poised to get even better in July, with dips of up to 4.5% for compacts and midsizers expected, and a 3% decline for used cars on the whole.
How are such steep discounts possible? It's mostly due to sky-high gas prices earlier this year. That boosted demand for used vehicles -- especially fuel-efficient rides like a used Toyota Prius -- which resulted in record high values for used cars.
So, in a way, the used car discounts we're seeing today are really just "corrections", bringing prices back down to normal levels.
If you're looking for a used car now, here are three things to consider:
Timing: Even though used car prices are expected to drop in July, there's no guarantee that they'll continue to slide much farther. In fact, NADA predicts that prices will still hover slightly above average for the remainder of the year, up about .07%. You can delay your purchase a little while if you like, but at some point, you're going to have to bite the proverbial bullet.
Brand: Many car companies begin rolling out their 2013 lineups in late summer and early fall. Most previous-year models lose luster -- and value -- when their shinier, newer siblings hit the lots, and the discounts grow for models that are being refreshed, like the stunning new 2013 Ford Escape. You may fare even better if you opt for a model that's been discontinued, like the Chevrolet Avalanche or Mitsubishi Eclipse.
Location: A recent study by the folks at CarGurus.com revealed that downtown shoppers score significantly better deals than their colleagues in the suburbs or rural areas. Not surprisingly, that's due to increased competition from nearby dealerships. In fact, in 48 of the 50 states (Indiana and Arkansas excluded), "used-car listings at city dealerships were priced an average of $345 less than at suburban/rural dealerships in the same state". In densely populated areas, the savings could be even greater. The biggest winners? Shoppers in Atlanta, Las Vegas, and New Orleans.
Got other used-car shopping tips you'd like to share? Drop us a line, or leave a note in the comments below. And be sure to visit our own used-car finder to see what's available near you.