Have You Priced A Used Car Lately?

Bertel Schmitt
by Bertel Schmitt

New car sales in the U.S. had crashed from more than 17 million a year to below 10 million. It did not faze you. You buy used anyway. Let someone else eat the depreciation. Now the slump is catching up with you, and you will pay through your nose.

Reports the Milwaukee Wisconsin Journal Sentinel:

Prices of late-model used cars have soared as the impact of auto production dropping by millions of vehicles has made its way into the pre-owned vehicle market.

Late model 2009 and later used cars are in short supply, because fewer were sold and fewer are traded in. If you said “what recession?” and recklessly bought new while the sky was falling, then you are now rewarded with a lot of money. Jesse Toprak of TrueCar.com explains:

“If you are actually trying to trade in a vehicle and get a new vehicle or simply get rid of what you have, you’re going to get some of the highest resale values we have seen in the last several years. Now, if you’re simply in need of a new vehicle that’s used, then you’re probably going to pay more than you would have just a few years ago.”

Joe Spina, senior analyst at Edmunds.com says that the average retail price for a three-year old car as of December 2008 was $13,849. By December 2011, that average retail price had jumped to $19,500.

This will probably go on for a while. Toprak predicts:

“It’s not really going to get any better for the next two to three years.

So what should you do? Toprak of Truecar tells you to buy new:

“If you look at the purchase from a cost of ownership perspective and not just the purchase price, and if you add in the cost of financing the vehicle, sometimes new cars can actually be even cheaper propositions than a newer used car.

Bruce Belzowski, assistant research scientist at the University of Michigan Transportation Research Institute in Ann Arbor recommends to buy older:

“If you are willing to go back to ’07 or ’08, there should be a lot of those.”

Even then, the prices will probably be up.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Alluster Alluster on Jan 30, 2012

    I am not complaining in the least bit. On Saturday, the nearest Toyota dealer offered me $3000 if I trade in my Focus for a Matrix, in addition to the $500 cash back and a $1000 conquest rebate(lucky for me, only the Civic and Focus qualify). I bought the Focus 22 Months and 26,000 miles ago for $3200 (excluding tax, title & tags). I was gonna wait until the Prius C comes out, but this deal is hard to beat.

  • Ciddyguy Ciddyguy on Jan 31, 2012

    I can attest to the used car prices being on the high side, not that I'm complaining but as a matter of observation. Just bought a very nice,black on black 2003 Mazda Protege5 with triptronic sport shift automatic, leather, power windows, door locks and keyless entry etc, even has the 2.0L 4 with 110,740 or so miles on it at a new car dealer, they were asking $8422. I got it plus $1000 trade in for my aging, and dying, but running Ranger and with $1100 dollars via tax refund as down payment. And the clincher was, not only is this one sweet ride, but all the necessary work has ALREADY been done (thanks to the dealer), including the timing belt and possibly the water pump too. Tires are good, the license tabs are good until next Nov, so paid all of $27.50 for that to transfer over. I bet that car in any other time in similar condition, it'd have sold for less than what I just paid, but I was on a very limited budget and thus could not swing $15K for a car right now. I knew that this wild market for used cars could find me in good stead as I tried to offload the old Ranger truck, which for it's condition, that's not bad

  • EBFlex China can F right off.
  • MrIcky And tbh, this is why I don't mind a little subsidization of our battery industry. If the American or at least free trade companies don't get some sort of good start, they'll never be able to float long enough to become competitive.
  • SCE to AUX Does the WTO have any teeth? Seems like countries just flail it at each other like a soft rubber stick for internal political purposes.
  • Peter You know we’ve entered the age of self driving vehicles When KIAs go from being stolen to rolling away by themselves.
  • Analoggrotto TTAC is full of drug addicts with short memories. Just beside this article is another very beautiful article about how the EV9 was internationally voted by a renowned board of automotive experts who are no doubt highly educated, wealthy and affluent; the best vehicle in entire world. That's planet earth for you numbskulls. Let me repeat: the best vehicle in the world is the Kia EV9. Voted, and sealed, and if you try to deny it Fanny Willis is ready to prosecute you; but she will send her boyfriend instead because she is busy.
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