Used-Car Market Still Hot and Will Get Hotter

Honda Accord Crosstour

Buy this car cheap!

As we said awhile back, it’s basic supply and demand. New cars are not being turned over (or produced in sufficient quantity) to satisfy pent-up demand. Add in several other factors:

  • New cars are expensive.
  • They last longer.
  • Rental fleets keep them going longer.
  • Owners are keeping their new vehicles longer.

It’s the last point that’s interesting to me. R.L. Polk tells us, courtesy of Keith Griffin, that new-car buyers hold their cars on average 63.9 months (per second quarter 2010 data), and that is 4.5 months longer than last year. Used vehicles are held 46.1 months.

What this means is simply that dealers aren’t getting enough used cars to satisfy demand, so prices are going up. Since this trend shows every sign of continuing for some time, let’s talk about how to shop smartly and, maybe, beat the tight market.

John DeCostanza offers some good advice here. Among his pointers: Scale down your wish list, look for cars in bargain segments, and buy a Pontiac. The last is a particularly good idea now, since GM has a nice financing deal (1.9 percent, 60 months) on 2005-2010 Pontiac G6 certified pre-owned (CPO) cars. Check out the prices of these cars on DealFinder, and prepare to be amazed. Then go in and bargain with your Pontiac dealer—before he closes his doors.

Mercedes-Benz pre-ownedYou can find all recent factory incentives for CPO cars listed here. Most expire in early January, so it would be smart to act now. Some of these are really good deals—like the 36 month/1.9 percent offer on a bunch of 2007-2009 Mercedes cars. More details on the Merc website.

Honda has 1.9 percent money available on its 2005-2010 Accords, including the Hybrid and the Crosstour (photo at top of story). Can you stomach the Crosstour’s looks for that kind of deal? Here is the fine print.

And a whole bunch of Fords are available at 2.9 percent for 48 months.

With deals like these, CPO cars are going to become more and more popular. We’ve discussed some of the pros and cons here, but consider that now might be a good time to buy, since the supply of late-model used cars shows signs of more tightening in the future. Or at least the near future. CPO prices won’t be immune.

Do you have plans to buy a used car in the near future? Will you consider CPO vehicles?

—jgoods

Find Used Cars in Your Area at CarGurus

Used Pontiac G6
Used Honda Accord
Used Honda Accord Crosstour

2 Comments

  1. I think they’re keeping their cars for 53 months on average because it takes about 60 months to pay them off. I was pricing a new Diesel 4X4 pickup truck today and frankly, I can buy a whole house for cheaper. Used, about the only thing I’ve seen is rolling junk. Why would someone think that a two-year-old pickup truck with 126,000 miles on it is worth $30,000?

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