Used Vehicle Trade-in Values Projected to Remain High in 2013

Feb. 10, 2013 - PRLog -- Last year’s bright spot for car buyers was the purchasing power they discovered in their used car that was being traded in.  It is beginning to look like 2013 will continue to be another excellent year for customers to consider trading in their used vehicle for either a new vehicle or a newer used vehicle.  

Midstate Dodge’s management team has watched this trend throughout 2012 and despite an uptick in used vehicle prices caused by Hurricane Sandy; prices have continued to track upwards in the wholesale used car market over the last few weeks.  Our management team’s outlook was reinforced by remarks made by Jonathan Banks, executive automotive analyst with the NADA Used Car Guide, while speaking to new car dealers in Orlando, during the annual NADA convention.

Mr. Banks outlined five key factors that he believed will result in high used vehicle prices in 2013:

Fed policy and a highly competitive lending environment will continue to see credit standards loosen and availability grow.
The recovery in housing and construction will pick up steam, benefitting both the economy and employment. This will help stoke demand for traditional used-car and -truck shoppers.  
Employment will continue to improve, especially toward the latter half of the year once the outcomes of the government sequester and debt ceiling extension are better known.
With a predicted increase of 8%, the supply of units up to three years in age will grow for the first time since 2006, but even with the increase, volume will still be 25% below where it was in the three years leading up to 2009.
While it’s expected that the recovery in new-vehicle sales will siphon off a portion of used-vehicle demand, there remains pent-up demand for those consumers who traditionally purchase only used vehicles.