An analysis of used car prices show that vehicle costs are at a five-year low and are expected to drop even lower next year.
The reason the prices of used cars are dropping have to do in part with a rebounding economy that has helped boost new car sales this year.
This has meant a surge of trade-ins, which must be moved. And to do that the prices are being cut for consumers.
The average used car sold for $15,617 at a franchised dealership in the third quarter, the lowest since the same quarter in 2009, when they averaged $14,808, according to the analysis by car-pricing website Edmunds.com. Prices have been easing for most of the year, and the third-quarter average was down 2.8% from the second quarter and 0.9% from the same quarter last year.
Another used-car price watcher, Tom Kontos of Adesa Analytical Services, noted a tiny uptick in wholesale prices in October, but says the overall trend is down. (..Used car prices are still higher than they were a decade ago, however.)
Additionally, leased cars are another reasons for the used car prices being so low.
Cheap lease deals were all the rage a few years ago, as dealers pushed new cars onto drivers who didn’t want to make the full purchase.
In recent years, more of those leased cars have been returned and are being sold as used.