US: Used car prices lower due to increase in new car sales image

The increased new cars sales have recently created a decline in the used cars prices. In 2013 sales of new cars went up 5.9% to around 16.5 million vehicles sold.

Jonathan Banks, executive analyst for NADA Used Car Guide, stated that for the first time in 20 years the wholesale auction prices for used cars increased in December, which was an important thing as for the past 10 years the average prices have dropped 1.4%.

Due to recent market sales, buyers who want to purchase a used car in the first three months of 2015 will find them at a similar or lower price than what they were being sold for in the first quarter of the last year. The auction price is not the only one influencing the price of used vehicles as tax refunds, lower gas prices and seasonal factors also contribute to the established sale prices. Dealerships are now expecting to get a large number of quality trade-ins from buyers who are interested in new car sales.

Until recent years, the price difference between a new car and a used one was nominal, which led to many buyers turning to new cars, contributing to the new vehicles sales growth. But with unemployment at the lowest level in 2008 and used cars inventory being rebuilt to regular levels, both new and used vehicles are finding interested buyers.

TrueCar estimates that the U.S. supply of used vehicle in 2015 will reach a more normal level after quite an unusually small inventory. The supply of used cars which are five years old or younger should increase by 10% the following year.

By Gabriela Florea