Have You Noticed Used Car Prices Coming Down?

One of the tenants of many personal finance bloggers is to always buy cars used.  Since a car typically loses the biggest chunk of its value the first year (or really, the first day) after being driven off the lot, the advice is to let someone else take that financial hit.

With the average age of the current car on the road being almost eleven years (really?) people have definitely been taking this to heart.

I’ve noticed it over the past few years.  Our two cars, a 2006 Pontiac G6 and a 2007 Buick Rainier, have held value very well.  I track their estimated value through Kelley Blue Book, and in some months, the values actually increased.  Lately, though, the value of both cars has been dropping month over month.

CNBC reports that the average value of a used car is now falling, around 2% from a year go.  This is apparently the first time in a while this has happened, and is a byproduct of the fact that Americans are buying more new cars than they have for the past few years.  As they do this, more used cars become available, thus dropping the price as the inventory increases.

If you’re selling a used car, this isn’t great news.  But, if you’re buying one, this could save you a bit of extra money.

We’re not in the market to make any changes with our cars, so this has no effect on us for the moment.  It would probably be a neutral thing if we did, considering our likely scenario would be that we’d sell one of our used cars (getting less than we would have a year ago) and buying a newer used car (and paying a little less).

What do you think?  Are you seeing used car prices drop?  Would this make you more or less inclined to buy a used car for your next purchase?

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14 thoughts on “Have You Noticed Used Car Prices Coming Down?

  1. Not at all, which is annoying because we’ll be in the market for getting a new to us car and with the prices I’ve been seeing it seems to make sense to spend a bit more and just get one new.

  2. I’ve noticed more newer cars in a lower price range. More “budget” brand new cars. Honda fit, Nissan Versa, Smart car, Fiesta, Kia, Rio, Miata, there’s so many now that they’re probably driving the prices down on used cars.

  3. I’ve noticed prices coming down too, more for some makes and models than others. I’m not in the market either, I switch cars like once a decade. But I think right now is probably a good time to buy one if you need one. I think part of the reason for cheaper used cars is that we’re seeing cheaper new cars, either through easy financing or lower prices.
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    • I actually haven’t seen the lower prices. I think the increases have slowed, but I don’t see as much discounting as there was a few years ago, which actually was one of the reasons that GM and Chrysler were in so much trouble. They started the cycle of discounts after 9/11 and couldn’t get out of it.

  4. I know there was a while where new car prices were coming down so much (well, affordability because of low-interest rate loans) that used car prices were steady/increasing more than usual. Now, I wonder if the opposite is in effect, in that low rates have been around for so long that new car affordability is no longer decreasing as much, thus pushing consumers back into used cars?
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    • I think it’s sort of opposite. The new car market is picking up so you have more consumers interested in new cars, making the market for used cars smaller, thus pushing the demand down, where prices follow. A lot of it has to do with the simple fact that people did keep cars for a lot longer over the past few years than ever before, and even if the average age were to stabilize, you’d eventually need to see the new sale numbers tick up. Which I believe is what’s happening.

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