NADA: Used Car Prices in 2012 Set to Peak in April

Trade-in values on used cars are expected to peak over the next few weeks, said Jonathan Banks, executive automotive analyst with the National Automobile Dealers Association (NADA) Used Car Guide.

“While prices for all used-vehicle segments will remain stable over the next two months, compact and mid-size cars will appreciate in value and outpace other segments because of rising gasoline prices, shortage of inventory and strong consumer demand for fuel-efficient vehicles,” Banks said.

Used values for the compact and mid-size car segments grew by an average of $300 or 2.6 percent from March to April, and values have grown by an average of $500 or 4.3 percent since the start of the year, according to the NADA Used Car Guide.


January vs. April Trade-in Value Increases for Compact and Mid-size Cars
Model Year Make/Model   January Value April Value April Increase % Increase
2011 Kia Rio $7,700 $9,100 $1,400 15%
2009 Toyota Prius $13,750 $15,675 $1,925 12%
2009 Toyota Camry $11,450 $12,900 $1,450 11%
2007 Honda Civic $7,100 $7,975 $875 11%
2011 Mazda Mazda3 $10,800 $12,100 $1,300 11%
2009 Nissan Altima $11,325 $12,675 $1,350 11%
2010 Chevrolet Aveo $8,125 $9,075 $950 10%
2010 Ford Focus $10,075 $11,225 $1,150 10%
2010 Dodge Caliber $9,600 $10,625 $1,025 10%
2009 Chevrolet Cobalt $5,975 $6,650 $675 10%

Source: NADA Used Car Guide

“The most advantageous time this year to trade in a used car will be April through May because values will be higher,” Banks added.

Another factor that has contributed to the dramatic rise in used-vehicle prices over the past year has been an inventory shortage of popular models resulting from fewer off-lease vehicles returning to the market and fewer trade-ins.

“The ongoing decline in the used-vehicle supply that began in 2009 has made it challenging for new-car dealers to consistently stock reliable, well-maintained used vehicles,” Banks said. “This means that dealers will be aggressive with trade-in offers for used vehicles that are in high consumer demand.”

NADA estimates that the used supply of vehicles under five years in age has declined by 14 percent since 2009.

“Clean, late-model used vehicles under six years old with reasonable mileage will command top dollar,” Banks said.

The NADA Used Car Guide is forecasting that used-car prices will decline in June and the rate of decline will pick up over the second half of the year. Prices in June will be about 0.5 percent less compared to April; and July’s prices will be about 1.5 percent less compared to April.

“Over the past few years, the auto industry has gone through automaker bankruptcies and restructurings, a challenging economic environment and natural disasters which have resulted in significant seasonal volatility,” Banks said. “Last year, used vehicle prices remained high through July because of a new-vehicle shortage stemming from the natural disasters in Japan, which led to a spike in demand for used vehicles. This year, used-vehicle prices will return to a more normal seasonal pattern.”