05.20.2013

Used car prices fall -- but not enough
USA TODAY
Chris Woodyard

Used-car prices are falling, and the trend is expected to continue
The drop isn't that big so far

Some work vehicles, like big pickups and vans, actually cost more now

After rising since the recession and hitting record highs, used car prices are easing, and the trend will continue, experts say.

Overall, used-car prices fell 4.5% on average in April at the wholesale level, compared with the same month last year, reports Adesa Consulting. After shooting to peaks each spring over the last three years, "They had almost no where else to go but down," says Adesa analyst Tom Kontos.

But the bad news for now is that prices for good, late-model used cars aren't falling much, even though new-car sales now are booming and trade-ins are coming in. That's because many consumers are trading in aging cars they nursed through the recession years -- clunkers worth so little that dealers don't even keep them around.

"Just too old," explains Allen Foster, general manager for Smart Motors, a Toyota dealership in Madison, Wis. Unable to resell them on his own used-car lot, Foster sends such trade-ins off to auction.
Minivans and full-size crossover vehicles took the biggest price declines over the past year, both falling more than 10% in average wholesale price. Cars overall were down 6.6%. In a sign that the economy, particularly, housing, is picking up steam, the only vehicles still seeing price increases are those typically used by workers. Full-size pickup prices rose 3.3%; full-size vans were up 8.1%

But for the sought-after late-model cars on lots at dealers affiliated with a major automaker, the average retail price was down a scant 0.5% in the first quarter from the quarter a year ago, to

an average of $15,793, says car-buying advice site Edmunds.com.
Prices are "edging downward (but) they are still pretty high," says Edmunds.com senior analyst Michelle Krebs.

With trade-in vehicles averaging 6.5 years, dealers aren't getting the kind of near-new trade-ins that most buyers want as a cheaper alternative to buying a new car for reliable transportation. More than one out of five car sales at franchised dealers were "certified" used cars, the cream puffs of the used-car lot that often come with long warranties as part of the deal.

Kontos advises used-car shoppers to try to hold out as prices continue to ease. "It won't hurt you to take your time and shop."
As for new-car buyers, he says now is the time to act. "Take advantage," he says. "Your trade-in is worth as much as it's going to be worth."

http://www.usatoday.com/story/money/cars/2013/05/20/used-car-prices-fall/2208637/

Front page…section B…money section. "Used Car Prices Roll Downhill". Allen Foster, Vice President/General Manager of Smart Motors is in today's USA TODAY. The USA TODAY national Monday-Thursday average daily circulation: 1,662,766.