Used car sales are on the rise. (Photo Credit: CC BY/Thomas R Machnitzki/Wikipedia)
After a five-month nosedive, used vehicle sales went up in November, reports Automotive News. According to the Manheim Used Vehicle Value Index, the wholesale used vehicle marketplace rebounded last month, although it still hasn’t reached November 2010 levels.
Retail used car sales up 3.4 percent in November
The Manheim Used Vehicle Value Index, which measures changes in used car prices, is constantly adjusted for model mix, mileage and time of year. It began in January 1995 with a 100 rating. Last month’s index was 123.8, up from 122.8 in October but down from 124.3 in November 2010.
Overall, retail used car sales went up by 3.4 percent in November 2011. Particular strength was noted among certified used cars financed via subprime auto loans. Among other important points brought out by the Manheim study:
- Even though auction sales of retired rental cars rose, prices remained steady.
- Commercial fleet vehicle prices rose for mid-sized, pickups and cargo fans after a weak October.
- Pickup and minivan sales have gone up more than compacts over the second half of 2011.
Used car buyers setting aside more cash
According to market research company CNW Research, consumers are setting aside more money for their used car purchases, which could mean A) That they may eventually realize they have enough cash for heavily discounted new cars, which will in turn drive down used car prices; or B) They’ll make larger down payments on used cars, which won’t be ideal for dealerships because it will eventually drive down used car prices.
Less financing means decreased loan commission
Dealerships lose out on significant loan commission money when consumers finance less of their automotive purchases. Only by lowering used car prices can dealers bring in more shoppers. Experts believe that this will lead to a “more rational” used car pricing structure than was on display in the first half of 2011.
The mobile boon
Increased used car sales activity can also be attributed to a booming mobile app market for used car information. Car Deal Expert, KBB.com and CarFax are among the industry leaders in providing consumers with prices, news and information regarding used cars. Having information available via smartphone has spurred sales, experts agree.