US light-duty sales are projected to hit a level not seen in 14 years, somewhere beyond 17 million units. At the same time, the average price of a new car in Q2 this year was $33,340 according to Edmunds, $33,560 according to Kelley Blue Book. The price creep is being driven by trucks - like the coming Ford F-150 Limited - which enjoy the largest demand new and used and whose transaction price gains outstripped the average by 1.1 percent.
Unlike last year, however, when newer used vehicles also saw an uptick in values, this year the prices for vehicles one- or two-years old have dropped. Luxury values are likewise down, declining seven percent in the past year to an average $52,438. The surge is coming from cars at least eight-years old and older, with values up 11 percent compared to last year, which Edmunds attributed in part to people priced out of the new crossover boom buying older SUVs they can afford. There are still deals to be found, but the rising tide doesn't look like receding soon. You'll find a press release below with more details, or click through to read the full report.
Report Finds that Shoppers are Increasingly Drawn to 'Near-New' Used Cars with Higher Price Tags, but Better Value
SANTA MONICA, Calif., Aug. 20, 2015 /PRNewswire/ -- The average used car sold in the U.S. is getting younger and pricier, according to the latest Used Vehicle Market Report from car shopping destination Edmunds.com. According to the report, the trends suggest a shifting tide in used car inventories, which are skewing more toward newer off-lease vehicles and certified pre-owned (CPO) programs. Edmunds' analysis found that average used car prices hit a record high of $18,800 in the second quarter, up 7.6 percent – or $1,300 per vehicle – from the second quarter of 2014. Meanwhile, the average age of used cars sold in Q2 2015 was 4.5 years, down from an average of 4.9 years the same time last year.
The influx of lease returns is leading to more availability and transactions of near-new used vehicles (aged five years or under). These newer used cars, of course, are typically priced higher than older used cars. But just because newer used cars come at a heftier price point, it doesn't mean that shoppers buying these vehicles are not locking in good values.
"Because there's a growing inventory of newer used cars, the prices on these vehicles seem to be more consumer-friendly than in the past," said Edmunds.com Director of Industry Analysis Jessica Caldwell. "Three-year old used cars, for example, have more bells and whistles than older used cars, and they're actually selling for less than they did just one year ago. Compare that to vehicles aged eight and over, whose prices are up 11 percent or more, on average, over last year. There's undoubtedly a growing value proposition these days in newer used cars."
Underscoring the popularity of 'near-new' used vehicles are CPO sales, which continue to have a meaningful impact on the used car market. In Q2 2015, dealers sold over 660,000 vehicles through CPO programs, the highest-ever volume for a single quarter. CPO sales accounted for 22.7 percent of used sales by dealers, another record for a single quarter.
Other insights found within the Q2 2015 Used Vehicle Market Report include:
- Pickup trucks are seeing the most price growth in the used car market. Passenger cars, on the other hand, are generally showing year-over-year declines as a result of lower demand.
- The average amount financed on a used car is $20,732, which is up three percent from last year. The finance amount is larger than the average price of used cars because many of the more inexpensive transactions are paid in cash.
- Loan terms on used cars are growing to offset higher average prices, and for the first time since before the recession, average APRs on used car loans are creeping higher.
- Edmunds' Q2 2015 Used Vehicle Market Report offers a wealth of detailed insights into the state of the used car market. Dealers, analysts and shoppers are encouraged to browse the full report at http://www.edmunds.com/industry-center/data/used-car-market-quarterly-report.html.
Dealers who are intrigued by the benefits of CPO programs may also be interested in Edmunds.com's newly-launched Edmunds Used+ product. Under Edmunds Used+, dealers can offer the same peace of mind that CPO programs offer by listing their inventory on Edmunds.com with a Vehicle Protection Plan (30-day/1,000-mile warranty and 12-month roadside assistance) and a $200 gas card, both underwritten and administered by Edmunds through third-party providers. Dealers interested in Edmunds Used+ can reach out to Edmunds at email@example.com or 1-855-EDMUNDS.
About Edmunds.com, Inc.
Car shopping destination Edmunds.com serves nearly 20 million visitors each month. With Edmunds.com Price Promise®, shoppers can buy smarter with instant, upfront prices for cars and trucks currently for sale at 10,000 dealer franchises across the U.S. Shoppers can browse not only dealer inventory, but also vehicle reviews, shopping tips, photos, videos and feature stories on both Edmunds' wired site and on its acclaimed mobile apps. Regarded as one of the top 20 best places to work in Southern California by Los Angeles Business Journal, Edmunds.com was also named one of "The World's Top 10 Most Innovative Companies of 2015 in Automotive" by Fast Company. Edmunds welcomes all car-shopping questions on its free Live Help Line at 1-855-782-4711 and firstname.lastname@example.org, via text at ED411 and on Twitter and Facebook. The company is based in Santa Monica, Calif. and has a satellite office in downtown Detroit, Mich., but you can find Edmunds from anywhere on YouTube, Pinterest, LinkedIn, Instagram, Google+ and Flipboard.