Planning to buy a used car? Kelley Blue Book says you may want to do it before the end of the year. Used car prices are expected to increase by four to six percent in early 2012 which means you’ll get more bang for your buck if you shop for a car while you shop for Christmas gifts. Used vehicle prices dropped 2.6 percent in October which was the fifth month in a row for declines. New vehicle inventories are dropping to normal levels and fuel prices are falling which means the car market is ready for a rebound.
Historically demand for used cars drops in December which makes it a good time to score a great deal. “Considering the already significant declines in used-car values since June, Kelley Blue Book predicts that values will decline an additional 3 to 4 percent by the end of the year,” said Alec Gutierrez, manager of vehicle valuation for Kelley Blue Book in a news release. “Used-car values typically decline through the fourth quarter due to a seasonal drop in demand that lasts through the holiday season. We believe sales volume also will decline through the remaining fourth quarter, similar to years past, and as a result values will likely remain soft through year-end, with few exceptions.”
While December may be a month for lagging sales, they are expected to pick up quite a bit during the first quarter of the new year. “Since 2009, used-vehicle registrations in the first quarter have increased by 15 to 20 percent on average from the preceding fourth quarter, and since we expect a similar increase in demand in 2012, a lack of supply will likely put upward pressure on values early in the year,” said Gutierrez. “Since we expect fewer leases and trade-ins replenishing supply, values will likely increase across the board as supply struggles to keep pace with demand. Values for certain segments can change more aggressively should fuel prices increase similar to earlier this year.” A typical increase for the new year is between one and four percent but Kelley Blue Book is predicting that to jump from four to six percent for 2012 because of a potential supply shortage.
Tags: Business Finance, vehicle, Planning, Book, new year
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