Used Car Prices Rise to New Heights, Edmunds.com Analysis ShowsBy Michelle Krebs June 30, 2010
The law of supply and demand is working overtime in the used-car market. Used-car prices have risen to levels not seen since at least 2004 largely due to the tight supply of used cars, Edmunds.com's analysis shows.
The average price of a three-year old car is 11.1 percent higher than it was last year - the highest year-over-year increase since Edmunds began keeping records in 2004.
Used cars of all ages are about 5.5 percent more expensive than they were last year.
Typically, the year-over-year increase is less than 3.5 percent.
"It is fashionable to cut corners, essentially, and a used-car purchase looks and feels thriftier," noted Edmunds.com Senior Analyst Jessica Caldwell.
But that isn't always the case, as shoppers are finding when they go online or visit the dealership intent on buying a used car but find it makes sense to buy a new one.
A number of people are researching used cars on our site but then ultimately buy a new car, apparently swayed by the limited used-car inventory that is available and the minimal difference between the prices of lightly used cars and their heavily incentivized new counterparts, said Caldwell.
Indeed, some new cars end up costing less than used ones. "It is worthwhile for a bargain-hunter to consider looking at heavily incentivized new cars, which in some cases are less expensive to buy than used cars given the dynamics of today's marketplace," said Edmunds.com Senior Consumer Advice Editor Philip Reed.
Edmunds.com tracks these deals at Some New Cars Now Cheaper than Used Cars.