Just a few years back, owning a used car was a hassle when it came time to buy a new one. You could try to sell it yourself by posting an ad online or in the local paper, and hope that an interested buyer would come along. This usually got you more money, but the sales process could take weeks (or even longer if you were selling an unpopular model). On the flip side, you could trade it in on your new vehicle, but most dealerships only offered a fraction of what the internet guides told you it was worth. The choices seemed to be bad (be patient and sell it yourself) or worse (take far less than what your car was worth at a dealer). Times have changed, and the demand for used cars is currently exceeding supply.
This is especially true for used pickup trucks. In late 2007, the average trade in price for a one to five year old pickup was $14,690. In late 2008, that price had fallen to $12,160, a drop of $2,500 in a single year. By the end of 2010, on the other hand, the average price had jumped to nearly $18,000, close to a 50% increase in just two years. Values for used sedans are up as well, but no where near as dramatically as pickup trucks. A used four cylinder Honda Accord was worth about $10,347 at the end of 2008; by 2010, that had increased to $11,985.
Why the change? New car sales have been depressed for the past three years (although they did begin a turn-around in 2010), which means that used vehicles simply aren’t entering the marketplace like they used to. Leasing has also dropped off dramatically (due to tighter credit restrictions), which has a significant impact on the amount of used inventory hitting dealer lots. Also, drivers on shaky financial or employment grounds are holding onto their cars longer, and are shopping for used replacement vehicles instead of new.
What does it all mean? You’ll have an easier time selling a used car these days than at any other point in recent history. You’ll still get more money by selling it on your own, but dealers are more willing to discuss trade in values, especially if you have something they want on their lot. If you’re in the market for a new car, this all plays into your favor; if you’re in the market for a used car, expect to spend more time and money looking for your next ride.
Source: New York Times