Prices for used cars begin to drop in the US, with a fall of 4.5% on average in April.
“They had almost no where else to go but down, ” says Adesa analyst Tom Kontos.
It’s been three years since the prices for used cars has continued to increase, reaching peaks each spring since 2010. Although prices are falling, the drop is not as steep as expected, even if new-car sales are high and trade-ins are coming in. This might be because customers are trading vehicles so old, that dealers will not even keep them around.
“Just too old,” explains Allen Foster, general manager for Smart Motors, a Toyota dealership in Madison, which sends such vehicles to auction.
Over the past year the vehicles which saw the biggest price declines were the minivans and the full-size crossover vehicles, which dropped more than 10%. Cars overall have fallen 6.6%, with the only vehicles which still see a price increase being those used by workers, such as full-size pickups, up 3.3% and full-size vans, up 8.1%.
Prices are “edging downward (but) they are still pretty high,” says Edmunds.com senior analyst Michelle Krebs.