Sales are still strong in the used-car market, and that means dealers are happy. Whether you will be happy remains to be seen. If you’re trading or selling a car, it’s good news.
For some of you buyers, as Edmunds.com tells us, it may even make more sense to buy new. That is, if you are looking at late-model higher-priced used cars, check out the incentives and offers on new ones as well. You may find a better deal.
If you are hoping to buy a three-year-old BMW X5, Acura MDX, or Chevy Tahoe, you’ll have to pay on average 24 to 28 percent more than last year. But check with our DealFinder to see if you can do better.
There’s also increased demand for certified pre-owned (CPO) cars—now 18.5 percent of all used cars, up from 13.8 percent last year. Automakers are expanding these programs, and one reason for their success is that some offer discounted or incentive financing on select models.
We are told that in October you can get discounted CPO loans from Audi, Jaguar, Land Rover, and BMW (for select models). GM may also have some incentives; check with your dealer.
Automotive News says that all used-car prices will remain high until 2013 because of the shortage of 2- to 5-year-old cars, “a situation we’ve never seen before,” said one commentator.
One consequence of all this is the strong growth of companies like CarMax and AutoZone. CarMax beat analysts’ estimates for September and turned in the best performance of any S&P 500 stock! Auto parts companies like AutoZone are zooming, as people are holding on to their old vehicles and putting their money into repairs.
One fact can attest to the long-term change: USA Today says that “the average fleet age for all cars and trucks in the U.S. was 10.2 years in the latest R.L. Polk survey, up 21% in the past 14 years.”
Fleet sales are going great, up 30 percent so far this year. But annualized household auto sales in the U.S. are down to 11.2 million units in August, and that’s a far cry from a year ago—14.1 million units—when Cash-for-Clunkers was in effect.
So most of us will be hanging on to our old cars, doing the necessary fix-ups, and hoping for better days when we won’t get hammered buying a newish used car.
Have you been searching for a late-model used car lately? Tell us about it.