Used car prices expected to increase again in 2012
"Consumers shopping for either a new or used vehicle will benefit this year from higher trade-in values along with loosening credit," Banks said. "
For dealers, reliance on customer trade-ins will increase as they strive to meet the challenges of growing demand in a supply-constrained market. On a seasonally adjusted basis, the NADA Used Car Guide predicts used vehicle prices will increase by 1.8 percent by the end of the year, peaking in April and May. Used vehicle prices increased 3 percent in 2011, Banks said.
"The slowing rate of depreciation on used vehicles over the course of the year will lead to even stronger trade-in values and enhance the equity that a consumer has in their vehicle," Banks added.
Banks also said fuel prices hovering at $3.50 a gallon will increase demand for fuel-efficient compact and midsize cars with prices up by 2.7 percent and 2.1 percent, respectively, by the end of the year. But the NADA Used Car Guide predicts prices for large SUVs will increase by 1.4 percent this year. "A 15 percent drop year-over-year in the used supply of large SUVs will offset the elevated price of gasoline," he said. By Joseph Szczesny