Falling Used Car Prices to Impact All Car Buyers
A glut of vehicles hitting used car lots will likely drive down prices as much as two percent this year, projects Edmunds.com, a well known destination for car shopping.
Further, Edmunds.com anticipates that the trend will likely cause a ripple effect, influencing fleets, as well as shoppers of both new and used cars.
“Many car shoppers might not realize how much the new- and used-car markets feed off each other,” says Edmunds.com Sr. Consumer Advice Editor Philip Reed. “The boom in new car leases, for example, is leading to a higher number of lease returns, which adds to the growing inventory of used cars, forcing their prices down.”
But, cautions Mr. Reed, the drop in used-car values could raise the monthly payments of new car leases. Softer “residual values” – a decline in what a car is worth at the end of the lease – are likely to cause higher monthly payments to make up the difference.
Edmunds.com also expect the following changes in the coming year as used car prices fall:
- Greater selection of used cars for buyers to browse.
- Better certified pre-owned (CPO) car deals.
- Lower values on vehicle trade-ins.
More info at www.edmunds.com
Category: General Update, Vehicles
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