A better economy – and the appearance of 2014 models on dealership lots – have led to the lowest used car prices in four years.
Drivers who went through the recession and kept their old cars running have now reached a point where they need to purchase new vehicles, according to an article on USA Today. The newspaper reported that lower unemployment rates, an overall better economy, low loan rates and the willingness of banks to lend have also made this an attractive used car buying season.
For business students, it’s another sign of an improving economy. It’s also good news for those looking to get a new car to travel back and forth to school.
Well, at least “new” to you. USA Today reports that the cost of a used car has dropped to the lowest price since the third quarter of 2009. The average used car sold for $15,617 at dealerships, that price in 2009 was $14,808.
Prices have lowered throughout the year, falling 2.8% in the third quarter and about 1% over the past year.
Used car prices still haven’t dropped below where they were a decade ago, according to Tom Kontos with Adesa Analytical Services. Kontos told USA Today that the decline has not been dramatic, but instead, like the recession recovery itself, has been slow and steady.
Prices should decline even further over the next few months, Kontos said, as those who bought new cars begin to trade them in, flooding the market with used cars.
“The used-car market, in terms of pricing, is poised for further softening,” Kontos told USA Today.
In addition to the improving economy, USA Today listed two other major reasons for the price decline.
First, new car sales are on track to surpass 15 million cars sold. That will be the highest amount of vehicles sold since 2006, according to Forbes. This has led to many more used cars on dealership lots.
Second, the cheap lease deals that started back in 2010 are now leading to more used cars on the market as those who leased cars are now trading the cars in as their lease deals expire.
According to Forbes, the auto industry is set to have its best sales volume in seven years by selling the old standbys: pickup trucks and utility vehicles. Fuel efficient vehicles that were in favor just a few years ago are not on the list.
This week, Forbes released the list of top-selling vehicles, which gives some idea of what vehicles will be hitting the used car market. They are:
Ford F-150. The competition at Chevrolet and Ram redesigned their trucks, but this stalwart from Ford remains No. 1.
Chevrolet Silverado. Sales of this redesigned truck have risen almost 20% in 2013, according to Forbes.
Toyota Camry. This perennial favorite remains the best-selling car in America.
Honda Accord. A redesign last year has to an 11% increase in sales, according to Forbes.
Ram 1500. Sales of this redesigned vehicle are rising even faster than the overall pickup market – 22.5%, according to Forbes.
Honda Civic. This perennial favorite remains the best-selling small car in America, with sales up 10% this year.
Nissan Altima. The third best-selling mid-sized sedan still sells enough to make the top 10.
Toyota Corolla. With a redesign, Toyota’s small car has seen a 5.6% increase in sales.
Honda CR-V. America’s top-selling crossover utility vehicle is fighting off stiff competition, mostly from Ford.
Ford Escape. Completely redesigned, the Escape has seen a 14% increase in sales this year, according to Forbes.
Rounding out the Top 20 best-selling cars list, in order, are: Ford Fusion, Chevrolet Cruze, Ford Focus, Chevrolet Equinox, Toyota Prius, Toyota RAV4, Hyundai Sonata, Chevrolet Malibu, Ford Explorer, GMC-Sierra.