SANTA MONICA, Calif. — May 19, 2016 — Prices of used compact and subcompact cars are down, and they offer the best value right now for used car shoppers, according to a new report released today by Edmunds.com, the leading car information and shopping network. The finding is one of a number of data-driven trends found in Edmunds' Q1 2016 Used Vehicle Market Report, which delivers a wealth of insights into the forces driving the used car market.
According to the report, prices for used compact cars are down 1.5 percent and prices for used subcompact cars are down 5.7 percent year over year. The price movements stand in sharp contrast to overall used car prices, which are up 3.2 percent to a first-quarter record of $18,838 per vehicle. Edmunds analysts say all of these trends result from one overarching cause: America's love affair with SUVs.
"Low gas prices and easy credit are making SUVs — and their higher price points — more appealing to used car shoppers, but they're also creating a great opportunity for small car shoppers who now have a wider selection at lower prices," says Edmunds.com Director of Industry Analysis Jessica Caldwell. "If you're a used car shopper right now and your primary objective is to get a great deal, you'd be smart to consider a compact or subcompact car."
Other key takeaways included in Edmunds Q1 2016 Used Vehicle Market Report include:
- Record Certified Pre-Owned Sales in Q1: Certified pre-owned (CPO) sales enjoyed a 5.2% lift in over Q1 2015 to a first quarter record of 646,390 sales. The trend underscores the exploding popularity of CPO vehicles, which are generally defined as used vehicles that have undergone a minimum 100-point inspections and are accompanied by manufacturer-backed warranties and may include other benefits such as free maintenance, 24/7 roadside assistance and low-APR financing.
- Credit Availability Mitigates High Prices: The spillover effect of higher vehicle values continues to drive average APRs lower and loan lengths higher. The average used vehicle loan term hit a record high 66.7 months, while the average interest rate on a used car loan in Q1 was 8.0 percent (down from 8.3 percent in Q1 last year).
- Used Car Payments Approaching Average Lease Payments: The average used car monthly payment is up 4.4 percent in the last three years, to $376/month. By comparison, the average new car lease payment is up 1.3 percent over the same period to $423/month. With only a $47 gap between average payments, shoppers now may be more willing to consider a new car lease over financing a used vehicle more than ever.
The full Q1 2016 Used Vehicle Market Report from Edmunds can be found at http://www.edmunds.com/industry-center/data/used-car-market-quarterly-report.html.
Edmunds.com proudly offers two million used car listings from thousands of dealers across the U.S., and many of them are available with Edmunds' Used+ perks which include a free gas card, 24/7 roadside assistance and a one-month warranty. Used car shoppers can start to find their perfect car right now by visiting http://www.edmunds.com/used-cars/for-sale/.
About Edmunds.com, Inc.
Car shopping destination Edmunds.com serves nearly 20 million visitors each month. With Edmunds.com Price Promise®, shoppers can buy smarter with instant, upfront prices for cars and trucks currently for sale at 10,000 dealer franchises across the U.S. Shoppers can browse not only dealer inventory, but also vehicle reviews, shopping tips, photos, videos and feature stories on both Edmunds' wired site and on its acclaimed mobile apps. Regarded as one of the best places to work in Southern California, Edmunds.com was also named one of "The World's Top 10 Most Innovative Companies of 2015 in Automotive" by Fast Company. Edmunds welcomes all car-shopping questions on its free Live Help Line at 1-855-782-4711 and firstname.lastname@example.org, via text at ED411 and on Twitter and Facebook. The company is based in Santa Monica, Calif. and has a satellite office in downtown Detroit, Mich., but you can find Edmunds from anywhere on YouTube, Pinterest, LinkedIn, Instagram, Google+ and Flipboard.