"Used-car shoppers may want to consider making a purchase sooner rather than later because prices aren't expected to come down any time soon. In fact, they are going up.
The average price tag on previously owned vehicles is on track to rise 1.8% in 2012, with much of that increase expected in the second half of the year, according to the National Automobile Dealers Association.
It would mark the third-consecutive year that used-car prices—already running at or near record highs—will have risen. Prices jumped 3% in 2011 from the prior year.
"I have been looking at used-car ads for two weeks and can't get over the prices," said John Timmons of Canton, Mich. "Looks like I am just going to have to take the plunge and buy."
A midsize used car under five years old is projected to sell at an average price of $11,850 this year, according to the group. Two years ago, the same car would have sold for $10,325. The average price for a large, used pickup truck one to five years old is expected to be $19,050, compared with $17,050 two years ago.
"The prices you see out there now is the new normal for the market," said Jonathan Banks, executive automotive analyst at the National Automobile Dealers Association. "We don't see prices having a huge falloff, which is good when it comes to depreciation, but for consumers, it means they will really have to shop around."
For years, the used-car market was a haven for thrifty shoppers looking to buy a car at an affordable price. Sticker prices often fluctuated thanks to auto makers who would routinely flood dealer lots with more cars than the market could handle. Big incentives to spark sales added another level of pricing pressure as consumers who rushed to nab a deal also would trade in their vehicles, further saturating the market."[Read more]
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