While the US new car market soared almost 6 percent last year to 16.5 million units, there are signs its peak has not been reached – the latest being a report coming from Edmunds.com.
It appears that just as it was the case with the new car and light truck average prices, used car prices have also seen a record increase to an average of $16,800 last year, growing 5.7 percent over the same period of 2013. Back then the average was of $15,900. There’s one explanation to the hike – the higher used car prices are a testament to the strong resale value of three- and four-year-old vehicles that are fresh out of lease contracts. Additionally, people that have the prospect of trading in their used car to purchase a new one are more likely to be proposed reasonable amounts. Another crucial reason for last year’s growth is the gain seen in the “certified pre-owned” category. Automakers and their dealers offer such cars as mostly off-lease vehicles that the latter recondition and offer them as alternatives for people that don’t have the power or will to spend the cash on a new model.
US dealers also saw a record level of certified pre-owned sales last year, delivering 2.3 million units – roughly 21 percent of the country’s used car market. The figure is also up from just 1.53 million autos back in 2009. “We fully expect CPO popularity to continue throughout 2015 because many leased cars are being returned in excellent shape,” says Jessica Caldwell, an analyst at Edmunds, which is a car-shopping information service.