Used Car Prices in October Experience Largest Drop Since 2011
Thanks to the government shutdown, the used car industry took a beating last month. In what is normally an already a soft month for new and used vehicle sales, October used vehicle prices dropped by 3.5 percent for models up to 8 years old. This decrease marks the largest fall since October 2011.According to reports from the National Automobile Dealers Association, midsize van prices fell 4.7 percent, luxury car prices fell 3.8 percent, and compact car prices fell 3.6 percent. This month's average, seasonally-adjusted price came out to $15,066, a light increase from last year's $15,042. "Without the drama created by federal lawmakers that resulted in the shutdown, it's likely that October's rate of decline would have been directly in line with recent seasonal norms," said Jonathan Banks, executive automotive analyst for the NADA Used Car Guide, in November's issue of Guidelines. Depreciation is set to continue on trend through the rest of the year, although prices may decrease more as consumer confidence isn't at what it used to be, thanks to the government shutdown. However, Banks believes that "consumer confidence will rebound given the end of the federal government hiatus and October's decent employment report."For the last two months of the year, NADA has estimated that prices will only drop an average of 1.9 percent, while trade-in values may lower by an average of 2.5 percent. Used vehicle prices are expected to finish 2013 up to 0.8 percent higher than 2012's record level. Source: NADA
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