Used Vehicle Prices Weaker Than a Year Ago
McLEAN, Va. -- Wholesale prices for used cars and light trucks up to eight years old rose a modest 0.8% in February. That's well below the 3% increase for the month over the past two years.
“Price growth for used vehicles through early spring will be weaker than what is typically seen for the period,” said Jonathan Banks, executive automotive analyst with the National Automobile Dealers Association Used Car Guide. “Consumers and businesses are beginning to react to the expiration of the 2% payroll tax holiday as well as political activity surrounding the federal budget sequester and debt ceiling extension. These factors will have a negative impact on household income and reduce spending."
Overall, the prices of used vehicle have risen 0.4% over the first two months of the year, significantly less than the 4.4% and 2.4% increases recorded over the same two months in 2011 and 2012, respectively. “The pull-ahead demand for used vehicles stimulated by Hurricane Sandy at the end of 2012 and the delay in filing income tax returns as a result of last year’s fiscal cliff resolution is also playing a role in slowing down price growth,” Banks noted.
In addition, February’s tepid performance dropped NADA’s seasonally-adjusted used-vehicle prices index to 122.7, a decline of 1.4% from January and just 0.9% higher than February 2012’s reading of 121.6. The index is a seasonally adjusted measurement of the change in prices for used vehicles up to eight years in age.
Looking ahead, NADA expects that used-vehicle prices in March will be flat to up moderately compared to February as prices through the second week of March showed some seasonal strength. NADA expects a modest decline in prices during April.
Published by The Business Journal, Youngstown, Ohio.
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