There’s good and bad news for car shoppers. Used car prices have fallen for the fourth straight month, according to vehicle auction company Manheim, which is great if you’re shopping for a used car. However, if you’re looking to trade-in or sell your vehicle, you might not get as much money for it.
Used car prices were down 0.7 percent in August, which means you likely won’t get a fire sale on the used vehicle you’re considering, but you should have a little more wiggle room in your price negotiations. Certain types of vehicles will likely have bigger discounts than others, Manheim reports. Luxury cars, compact cars, midsize cars and SUVs all saw price declines in August compared with a year ago, while prices for used trucks and vans were up.
One factor that’s contributing to the decline in used car prices is that new car sales are very good right now. “Amid concerns over subprime credit and high incentives, the new-car market shows no sign of slowing down,” said Karl Brauer, senior analyst at Kelley Blue Book, of August’s new car sales. “With monthly car sales at their highest level in more than a decade, it’s clear pent-up demand remains the strongest influencer.”
Those high new car sales levels mean buyers needed to get rid of their old vehicle. Manheim says that “with new vehicle sales so strong, keep in mind that for franchised dealers a lot of great inventory is literally being driven to their door every day in the form of trade-ins and lease turn-ins.”
[Research Used Vehicles with U.S. News’ Used Car Rankings]
Though you might not get as much for your trade-in vehicle right now, remember to negotiate the price of your trade separate from the price of your new vehicle. You can also sell it on your own, which might help you get more money for it.
USA Today points out that another impact of declining used car prices on the automotive market is in the form of new car leases, which are priced based on the future/residual value of the vehicle. “As resale prices fall, automakers adjust predicted depreciation schedules and have to raise lease prices.”
Shopping for a used car? Search our Used Car Inventory, where you can browse used vehicles for sale in your area. Also, check out the Best Used Car Deals this month, and be sure to follow us on Twitter and Facebook.