By on April 10, 2012

Used car prices have been rising for a while to a degree that sometimes it can be cheaper to buy new than used. If you have been sitting on the fence, it could be time to hop on down. Used car prices are predicted to peak within the next two months.

Already, deals on new cars are not as common as a few months ago when carmakers splurged with incentives. Now, the National Automobile Dealers Association (NADA) Used Car Guide predicts that trade-in values on used cars will go all acme on you within the next few weeks.  Said Jonathan Banks, executive automotive analyst at NADA:

“The most advantageous time this year to trade in a used car will be April through May because values will be higher. Last year, used vehicle prices remained high through July because of a new-vehicle shortage stemming from the natural disasters in Japan, which led to a spike in demand for used vehicles. This year, used-vehicle prices will return to a more normal seasonal pattern.”

On the other hand, if you are not eager to sell, don’t. Keep in mind that NADA is the club of automobile dealers, and they want you to buy new even more than sell used. Because of carmageddon, supply of clean cars under five years is low and will remain low for a while.

Year Make/Model Apr Jan $ Increase  % Increase
2011 Kia Rio $9,100 $7,700 $1,400 15%
2009 Toyota Prius $15,675 $13,750 $1,925 12%
2009 Toyota Camry $12,900 $11,450 $1,450 11%
2007 Honda Civic $7,975 $7,100 $875 11%
2011 Mazda Mazda3 $12,100 $10,800 $1,300 11%
2009 Nissan Altima $12,675 $11,325 $1,350 11%
2010 Chevrolet Aveo $9,075 $8,125 $950 10%
2010 Ford Focus $11,225 $10,075 $1,150 10%
2010 Dodge Caliber $10,625 $9,600 $1,025 10%
2009 Chevrolet Cobalt $6,650 $5,975 $675 10%
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62 Comments on “Sell Your Car Now, Or Forever Keep The Piece …...”


  • avatar
    mikey

    I see demand for good used cars,being with us for quite some time yet. There is a whole lot of us baby boomers living on fixed incomes. Our numbers are growing by the day.

    With depreciation being a huge “new car” cost factor, the boomers arn’t willing to throw away thousands. Keeping up with the Jones’s is ancient history these days.

    • 0 avatar
      jmo2

      “With depreciation being a huge “new car” cost factor”

      Did you not read the article?

      “Used car prices have been rising for a while to a degree that sometimes it can be cheaper to buy new than used. “

      • 0 avatar
        mikey

        Yeah I read the article. Everyone of the cars listed is worth a lot less than it was new.

        No matter how much you fiddle with the numbers, new car depreciation is something to be considered.

        So the used car jumped 10 percent? The savvy used car buyer is still ahead of the game.

      • 0 avatar
        jmo2

        “Everyone of the cars listed is worth a lot less than it was new.”

        As they should be, they are that much closer to the crusher.

        You will admit that used cars aren’t nearly the slam dunk they used to be in terms of saving money.

      • 0 avatar
        mikey

        @jmo2……I will give you that. There is a lot of other peoples headaches siting on used car lots.

      • 0 avatar
        tuffjuff

        When I unloaded my LEMON-fresh 2010 Kia Forte EX with 20,000 miles 13 months after I bought it, I got $13,500 in trade toward my Focus. I had only paid $15,200 for it a year prior. $1,700 in depreciation in a year is ridiculously good, and a testament to the market.

        A quick search at several local car dealerships shows you could pick up a brand new Forte, should you want such an awful car, for probably less than it would cost you to get into a used model.

        A buddy sold his 2001 Ford Ranger with I want to say 85,000 miles on the odo for $9,500 CASH to a local dealership last fall. Now is the time to sell your car and buy a different one!

      • 0 avatar
        28-cars-later

        TuffJuff – I’ve noticed dealers want ten grand+ for 10yo 100K 4×4 Rangers in Western PA in the past year or so. I suppose when your paying 95 bucks on trade for these baby trucks this would be why… why on earth is a truck of this vintage worth so much is the better question. I suppose the myth of gas savings over the larger trucks is to blame.

    • 0 avatar
      krhodes1

      So what exactly is “fixed income” about a pension? Other than the fact that you can’t get laid off, downsized, fired, etc? Most include cost of living increase provisions that are AT LEAST as generous as the raises most average folks get at thier actual jobs, and you could go get a part time job if you want, since you aren’t actually working any more.

      Just a pet peeve of mine.

      But as to the topic at hand, I have a buddy with the 150 mile a day commute who ran an ’03 Jetta TDI up to nearly 300K with minimal issues, then on a whim traded it last year for an ’09 V6 Mercury Milan. He instantly regreted this decision as his mpg went from 50+ to 25. Getting eaten alive in gas bills, he had been looking at 2-3yo TDIs, but ended up buying a brand new one last week. New one was only $3K more than used, .9% financing, free maintenance, and full warranty. A no brainer, IMHO. I drove it today, nice car, scoots right along. 6spd manual sedan with NAV, I think he got it for $25K, AND they gave him what he paid for the Milan last year as trade-in, so he only lost a sleeve on that, not the whole shirt.

      • 0 avatar
        jhott997

        I don’t understand the “retired folks” referring to their retirement income as “fixed income” either. Last time I checked my salary was “fixed” as well. Also a Pet peeve of mine.

      • 0 avatar
        highdesertcat

        If you guys ever reach ‘retirement’ age, you’ll know what fixed-income means.

        When your retirement income is indexed to the cost-of-living, it means that your buying power remains the same as your money becomes worth less and less due to inflation and devaluation. Getting a raise does not mean getting more buying power.

        It becomes a lot more complicated from that point on. But one thing is for sure, if you paid into social security for all of your working life, what you get back doesn’t come close to what you paid in so you better have a large stash or another source of income.

        And as far as getting another job, parttime or otherwise, not that simple unless you set up your own business where there is no age discrimination.

        A lot of oldies are doing just that, and getting to keep a lot more money than they ever did before. One of my neighbors is a retired plumber who moved here from New Jersey and he does a lot of freelance work. He recently helped me install a brand new water heater and dishwasher, and brought everything up to code for me. I paid him in cash.

        If a retiree is willing to work, there’s a lot of money to be made. I maintain rental houses for my wife’s dad, and the money is real good (more than MY social security retirement check every month). He pays me in cash.

        Yep, when you guys retire, you’ll find out what fixed-income means and entails. You better start saving now.

  • avatar
    aristurtle

    I’m considering selling now and going without a car (motorcycle-only) for a few months until prices cool down.

  • avatar
    grzydj

    Probably going to end up buying new here. I’ve been eying a pre owned 2011 Toyota Tacoma with only 9k miles on it at a local dealer. The price has actually gone up a thousand dollars since they put it on the lot a few weeks ago.

    I wanted to find a first gen Tacoma with the 3.4 V6, but they’re getting to be somewhat rare due to frame rust issues, or either that they have well over 200k miles on them, even then people are still asking well over 10 grand for them. It’s crazy.

  • avatar
    fiasco

    I went used shopping nearly two years ago and ended up going new because it was only a few grand more for something with zero miles and no shoddy bodywork or floor mats covering barf/blood stains…when I was at the dealer the other day, the used stuff on the front line was still barely less money than brand new sticker.

  • avatar
    LeMansteve

    Sorry, this is off topic. So the official name of Mazda’s compact sedan is the Mazda3? Make = Mazda and model = Mazda3?

    “Yes, I’d like to get an insurance quote on the Mazda Mazda3.”
    “…what? Don’t you mean the Mazda 3?”
    “No, the Mazda Mazda3.”
    etc

    • 0 avatar
      Speedygreg7

      Yes, and the Mazdaspeed version is the Mazda Mazda3 Mazdaspeed3

    • 0 avatar
      ciddyguy

      Yes, the official name is the Mazda3. Mazda has shortened its numbering nomenclature to just a single digit, the 323 beget the Protege5, which became the 3, the 626 became simply the 6 etc.

      So when you go to insure a current Mazda, it’s simply, the Mazda3.

    • 0 avatar
      potatobreath

      Yes, it’s the Mazda Mazda3. I rarely refer to it make and model, because it’s clunky and causes confusion. Me: “Mazda3″. I prefer the funky names like Axela.

      It drives me nutty as a car enthusiast when people refer to their Mazda3 or Mazdaspeed3 as ‘M3′ seriously outside of a Mazda forum.

      “What do you drive?”
      “M3.”
      “Whoa? Where is it?”
      “It’s the Mazda hatch at the end of the lot. Sweetest ride ever. Just got it a week ago.”
      “…”

    • 0 avatar
      Brock

      “Yes, and the Mazdaspeed version is the Mazda Mazda3 Mazdaspeed3″ – Just not true. It is the Mazda Mazdaspeed3.

      MS3 makes a lot more sense.

  • avatar
    onyxtape

    Just got a new loaded 2012 Infiniti G37 for $5000-$6000 more than a 2009/2010 with 25k miles with scuff marks from a woman’s heel on the back seat ceiling (and that was the best one on the Infiniti dealer’s lot). No contest.

    I remember shopping for a Subaru Outback 4-5 years ago and it was something like $11,000 for something with close to 100k miles (dog and cigarette smells included), so this is not new depending on the car model.

    Are we shipping used cars to sell overseas or something? Is this another case of India and China slurping up our stuff and driving up demand?

  • avatar
    Zackman

    I’ve been toying with the idea of selling/trading my Impala for a new one, but the numbers just don’t add up for me yet. Although I’m having shocks & struts replaced this week, my car has 96K miles and runs very well. Whether the shocks and struts should have worn out at that mileage figure is open to question. I hope the drivetrain lasts much, much longer…

    I’ll be 62 in eleven months, and with both of our daily drivers approaching 100K miles, I’m a bit concerned that we will be forced to replace one of the vehicles when I’m dangerously close to retirement and do not want to face a car payment on a soon-to-be-fixed-income!

    We have our MX5, which we are still paying on – a modest payment at that, but to be forced to use that every day for my commute would be rough, although I would do what I have to do if it came down to it. Wifey’s CR-V eats too much gas, so that option is out, plus it has all the comfort of sitting on a park bench and it is not kind to my hamstring, even with cruise control on!

    Decisions, decisions…

    • 0 avatar
      RV1458

      Better start saving, you’re going to have to make more than one car replacement during retirement on that fixed-income…

    • 0 avatar
      mikey

      @Zackman…. For now I would spend the money on the Impala. Just be carefull it doesn’t turn into a money pit.

      As much as I love my Impala, that deprecition thing is always a factor. Give me ten or more years good ,cheap driving and I will be happy.

      • 0 avatar
        Zackman

        @Mikey:

        I just did! Struts all around, rear rotors replaced, oil change.

        I’m waiting until next year when the new Impalas come out in the “flesh”, so to speak, then I’ll make a decision on something new, whether an Impala or something else. Right now, my mind’s open.

        Wifey’s work is less than 5 miles from home, so her CR-V should last a very long time. The Impala is my 100-mile-daily highway cruiser, hopefully, the road will be kind to it, too, but we’ll see…I don’t believe it’ll last as long as the Honda, though.

        As to depreciation – we keep our cars for the long haul, so that’s not much of a concern to me.

      • 0 avatar
        28-cars-later

        Zack – Once the W-body Impala goes the 2012s should flatten to 10-12K wholesale by next spring. From 2013 onward you should be able to pick up a ’12 with the super fun 3.6 for around that price. If you could get 3-4 (in this wild market) for yours with the maint. you just did, that only leaves you with 6-7ish to finance on a 2012. Food for thought.

      • 0 avatar
        chicagoland

        The all new 2014 Impala [shown recently] isn’t out for nearly a year yet. The ’13 will be the last “W” body

    • 0 avatar
      wstarvingteacher

      I retired about a year and a half ago. My plan having looked at all the QE stages and deficit spending was to take what advantage I could of the inflation that was sure to come. I have a car payment that won’t increase and a house payment that seems downright cheap. If you think you will want a new car buy it before you retire. The payments won’t increase like everything else does.

      I know that some of the readers are probably economists who will take me to task but this has worked for me. I hope not to buy again for ten years.

    • 0 avatar
      golden2husky

      Zackman, any car’s shocks and struts are toast at 100K. Some cars have struts that are just moderately shot at that time; others will be completely dead. Don’t sweat it. Enjoy the newfound body control…

  • avatar
    burgersandbeer

    I think anyone capable of thinking logically and escaping the “new car losing half its value when you drive it off the lot” mantra can find plenty of examples where it makes more sense to buy new. If anecdotal stories of beaten down Outbacks don’t convince you, play around with Edmund’s TCO calculator for almost any C-segment car.

    With this in mind, I can’t believe how slow the market has been to correct the situation. Every time I see one of Steve’s stories of auction prices I think “here’s an idea, why don’t all these dealers just keep their wallets in their pockets when they see these cars?” The thought is you are stuck paying the market rate, but if everyone would have the discipline stop overpaying, the market rate would go down.

    • 0 avatar
      redmondjp

      People aren’t overpaying, it’s simple supply and demand, with inflation factored in as well. Demand is high for good, used cars.

      If the dealers couldn’t re-sell those cars at a profit, they wouldn’t be buying them.

      • 0 avatar
        burgersandbeer

        With prices people are asking, it looks like demand is high for bad used cars as well.

      • 0 avatar
        jmo2

        “People aren’t overpaying”

        I’d say some of them are as conventional wisdom takes a while to catch up to changing market conditions. I’d be willing to bet that a fair number of folks paying top dollar for a “gently used car” haven’t cross shopped them against new. Their dad told them “gently used is the way to go” back in 1992 and they are still going with that – even though reality has changed.

  • avatar
    RV1458

    Bertel, do you know which end of the used car market has been impacted most? In other words, are $2,000 cars or $12,000 cars priced in bubble territory? Or do you have to go even higher in price to really hit bubble territory?

  • avatar
    makabe

    Got a new Honda Fit–the used ones are stupid expensive–more $$ than new for a 2 year old with below average mileage.

    • 0 avatar
      Jellodyne

      When I was looking at the Fit, the new was about 2 grand more than the 30k mile used examples on the lot, and the new had 0.9% 60 month no money down financing. I could have gotten about 4% financing on the used ones. After financing, the new one wasn’t literally cheaper than the used, but it was very close.

  • avatar
    CJinSD

    The examples listed are all towards the more fuel efficient range of the spectrum, so I imagine their values will be safe for as long as energy is a luxury good. If gasoline is $7.00 a gallon in August, resale values won’t be falling for 4 cylinder cars.

  • avatar
    tankinbeans

    I’m curious if it is still true that financing on new cars is generally going to be less than on used cars. Could the couple thousand saved on a 1 year old used car be eaten up by interest and fees? Cash buyers being the exception here.

  • avatar
    AMC_CJ

    Back in the summer we went used car shopping. Ended up buying a new car (12′ Mustang V6) for cheaper then slightly used versions (even a few 10′s having with the 4.0 V6). I wouldn’t even consider the previous V6 model, and the last-gen V8′s were still topping around the $20k mark in decent shape and with less then 50k miles.

    There is a upside to this though. The classic-car bubble has somewhat of busted, and plain-Jain pre-80′s cars have bottomed out in price. I picked up a 78 Chevy Malibu, 99k Original miles, looked a little rough but great solid shape with barely a spot of rust, body or frame. A little bit of work, and a few bucks (I mean literally, just a few hundred dollars in basic stuff) and I’ve gone nearly two years and 16k miles almost trouble free; all for under $3k. Great car, no taxes, dirt-cheap insurance. It helps though being a mechanic by trade.

    Having a few tools and a little know how, and you can easily drive away in a real nice classic sedan for around $5k.

    • 0 avatar
      texan01

      I hear you, I picked up my ’77 Chevelle for a song, and tossed a transmission in it, that I already had. and it’s been a dead reliable cruiser for less than a grand. for 40,000 miles. Even gets decent mileage 15-22, out of the two barrel 305 and the A/C even worked when I bought it.

    • 0 avatar
      ajla

      I wish I could find a decent RWD X-body that hasn’t been converted into a drag car or isn’t located 900 miles away.

  • avatar
    philadlj

    I wasn’t going to buy a 2012 Civic. First of all, I didn’t like it; I prefer the 2009-2011 model inside, out, and on the road. Secondly, with identical features the 2012 cost $6700 more than the ’09 I ultimately bought.

    • 0 avatar
      ringomon

      How many miles did you have on it? $6700 for three years isn’t that bad- they are the best three years of the cars life.

      Also you’ll have to replace the ’09 3 years sooner than you would if you had bought new. That’s where you make up the difference between the used and new prices.

      If you like the car better that’s one thing, but I don’t think there’s really much of an economic argument that you’re making. C-class cars depreciation is so flat there’s very little economic benefit at this point to not buying new.

    • 0 avatar
      jmo2

      “with identical features the 2012 cost $6700 more”

      Is that calculation based on MSRP?

  • avatar
    ringomon

    (As Bertel kind of mentions but it’s not 100% clear) those numbers in the chart are trade-in values I think, not retail used car values. When you look at used car street prices s it’s really evident how much better a value buying new is at this point in economy cars.

    A stripper 2012 Mazda 3 manual goes for 16k including destination.
    A stripper 2010 Mazda 3 manual with 24k miles in excellent condition has a KBB value of 13.8k. Even in fair (the worst) condition it is worth 11.6k

    The best two years of a cars life, piece of mind being the only owner, and 2/3rds of the warranty are worth 2.5 k anyday.
    If you are buying c-class cars or smaller it’s crazy not to buy new. Especially if you are financing in any way as you can often get some good APR incentives that you can’t get with a new car loan.

    If you can afford the higher payments the first couple years, you’ll be sitting pretty the life of the car.

    • 0 avatar
      ringomon

      …the 2010 model that I bought for 18k new two years ago with ~24k miles on it now has a KBB value of 16.8k suggested dealer retail value right now.

      It’s almost to the point where I should sell my car and buy a newer one the used values are so high.

  • avatar
    johnhowington

    as interesting as this “phenomenon” is, i think drumming this idea is a conspiracy to just sell more new cars.

  • avatar
    gasser

    My daughter’s 2003 Honda Accord EX was totaled at the end of February. Her insurance carrier gave her almost $11,000 for a car with 90,000 miles and a dent in each and every panel. Being short on cash, she wanted to buy used, but since I had been following this story on TTAC! I convinced her to buy new with that fat $11K as the down payment. We won’t see reasonable prices return until new care volumes go up substantially and stay up for several years.

    • 0 avatar
      johnhowington

      would love to know how that happened, i see lots of 2003 vintage accords going for around 7k on craigslist.

      • 0 avatar
        28-cars-later

        John – May have been a coupe. I agree the real value of one of those cars is prob 5-7K, but Honda’s have always been stupidly expensive used around here, I suppose some dealers give a high trade. Maybe the blue/black book value where this guy lives is even higher, hence the insurance payout.

        This buy here pay here has 10K on a coupe, no miles listed
        http://pittsburgh.craigslist.org/ctd/2949644747.html

        Heres a sedan in pgh 121k, they have 9K on it
        http://pittsburgh.craigslist.org/ctd/2948939156.html

  • avatar
    confused1096

    Even beaters have shot up in value due to scrap price increases. The day of the $500 car is over, junkyards pay that now.

  • avatar
    lilpoindexter

    I have three daily/project cars…the newest 1995…the oldest 1978…I wonder if any of them have gone up in value…hmmmm

  • avatar
    Spencer Williams

    I just sold my car, as the time seems to be right. A buyer friend told me that used car prices right now are high in general, that prices go up a bit around tax time due to increased demand, and that Mustangs sell best right before the summer months. I had a low mileage 09 Mustang GT I bought a little over three years ago for a little over 20k (not counting taxes) and I just sold it for 17k. I’m happy with that. I had the rear quarter panel replaced as I scraped it up pretty good, and I thought that “frame repair” would kill the value. Wonder what I would’ve been offered with no accidents.
    Of course, I still have to buy another car. I was going to buy a ’12 GT as they are incentivized right now, and I could get a new one with Brembos and no other options cheaper or the same price as the used 11s and 12s for sale.

    In the end, I think I need to get off the fast car train for a bit and buy a cheap beater I can work on (meaning break and repair and break again). I’m thinking CRX, old 318 or 325is, BMW 2002, or Datsun 510. The whole light and tossable angle seems appealing. Any input for or against any of those choices appreciated. I’m trying to spend under 5k, the less the better. (And no, I’m not looking for a Miata, for the record.) Oh and foxbody mustangs, I just can’t resist them.
    Thanks!

    • 0 avatar
      redmondjp

      Under $5K and you want it to be a reliable daily driver? I wish you luck. You may be better off with two $3K cars – that way, you can drive one while you are working on the other one (I have extra cars in my own fleet for this very reason, since I do my own auto repair work). Do you like working on cars?

      But in any case, you are talking about going to the other end of the spectrum from your current car in just about every way. Are you sure that is what you want to do? No matter how nice of a 20-25 year-old car you get, it’s going to have more rattles and requires A LOT more TLC than what you have now.

      • 0 avatar
        Spencer Williams

        Yeah, I hear you, reliable won’t be in the cards, and I’m okay with that. It will be my only car, so I suppose a daily driver, but I don’t drive to work, so I only really drive for fun and groceries and whatever. And I’m taking auto classes at night, so I have access to a lift and a ton of tools, so I’m up for whatever maintenance-wise.

  • avatar
    chicagoland

    Mileage still matters though. Last year, my 2009 Focus had “only” 53K miles, and was offered $10K trade in. Now, with 76K, only $7500 offered. But, dealers will try to sell it for $11K.


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