Used car pricesare likely to decline this year in America because consumers turn in cars from leases and supplies of older models become more readily available.
Used car prices increased 18% from 2007 to 2013. American consumers pay an average of $14,685 last year. Americans bought nearly 42 million used vehicles, 3 times as many as new cars sold.
However, the year-over-year rise is expected to stop with used-car prices expected to decline.
A decline in uesd car prices has been expected as the prices have remained high for several years. Actually, prices remained higher in 2013 than expected. And the high prices limit access to some consumers to late-model vehicles.
Used car prices got a big bounce following the recession because during 2008 and 2009 so few people bought or leased cars that supplies of such vehicles became very limited.
That picture is now changing. Many new vehicles leased two to three years ago are ready to be turned back in, giving dealers a fresh supply of slightly older models that they can then turnaround and sell to used-car customers.
Used-car supplies remain well below historic levels and with the economy on the mend, pent-up demand among customers to replace aging vehicles will continue to drive strong demand for both new and used cars.
