Used cars in demand
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Kai Ryssdal: Here is an economic indicator from the classifieds for you. If you happen to be in the market for a used car, move over. There’s been a jump in sales and also prices. In fact, brace yourself for some sticker shock. Edmunds.com says the average price for a three-year-old car is up 10 percent over the past year to almost $20,000 — for something that’s used.
Our Washington bureau chief John Dimsdale draws the wider economic lesson.
John Dimsdale: A year ago, used cars made up 75 percent of the overall market. This year, it’s 80 percent.
Edmunds.com analyst Jessica Caldwell is seeing pent-up demand for all types of used vehicles.
Jessica Caldwell: A lot of people have waited, hoping the economy will get better to purchase. But they still don’t want to pay for a new vehicle.
Prices for used gas guzzlers have especially rebounded. Some SUVs, trucks and luxury sedans are going for 30 percent higher than they did just a year ago. Caldwell says folks who shed their big vehicles when gas prices were high, are having second thoughts.
Caldwell: We’re seeing some customers are being a bit remorseful on that and deciding that this really isn’t working with my lifestyle I need to get back into a truck or SUV.
Sound of an auctioneer
At a used car auction in Florence, S.C. this afternoon, Kenny Hyman was on the lookout for good prospects. He is used car sales manager at King Cadillac, Buick and Pontiac. He says it’s not just lots of demand that’s driving prices — there’s also less supply.
Kenny Hyman: They’re just not out there to buy. Some auctions would have 1,000 cars, are having 200 and 300 now.
Nine years ago, the average owner held on to a car for 28 months. Now, that’s more like 44 months. Polk analyst Lonnie Miller says eventually higher prices for used cars will help new car sales.
Lonnie Miller: Because at some point people are going to say, “Well, if I’m going to pay that much, I’m going to buy a new car.”
But not until they’re more confident about their own financial outlook.
In Washington, I’m John Dimsdale for Marketplace.
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