Average prices of late-model used cars and trucks for 2013 will drop compared to last year, but average prices of older used vehicles -- say those 4 to 6 years old -- will increase, predicts NADA Used Car Guides.
Over the last few years, dealers became accustomed to selling older used vehicles when late-model used vehicles -- especially those sold as new in 2008 and 2009 -- were in tight supply and their prices sky-rocketed, says Larry Dixon, an analyst with the guide company. Today, those same cars and trucks, though no longer considered late-model used vehicles, are still in short supply.
Dixon says those older used vehicles are still in demand. He cited Sonic Automotive Inc.'s recent announcement that it will create a separate used-vehicle network next year.
Better vehicle quality and dependability mean that dealers are willing to sell vehicles that are older than what they would have carried several years ago, he adds.
"Having to divert more attention to used-car operations because of the recession and the aftermath of the recession, dealers have become more adept and more skilled at selling vehicles that they normally wouldn't have sold -- and consumers have become more comfortable in buying those vehicles," Dixon says.
According to NADA guide data, the supply of 4- to 6-year-old used vehicles is expected to drop 11 percent in 2013. Their prices are forecast to rise 1.5 percent for the year compared to like-aged vehicles in 2012.
Conversely, the supply of used vehicles up to 3 years old will grow 12 percent this year because of an uptick in the number of off-lease vehicles re-entering the market, and their prices will drop 1.5 percent, the company predicts.
In 2014, the number of 4- to 6-year-old vehicles is predicted to drop 12 percent and the number of vehicles up to 3 years old is predicted to increase by 10 percent.
In 2014, the NADA guide says, 2008 and 2009 models will depreciate in value less than other model years, even compared to vehicles that are older.
For example, in 2014, 2008 models are expected to depreciate 14.2 percent and 2009 models are expected to depreciate 14.3 percent. In contrast, 2007 models are expected to depreciate about 14.8 percent, while 2006 models will depreciate 15.1 percent, the NADA guide predicts.
Dixon says the NADA guide calculates that 2008-09 models will depreciate in 2014 based on their being another year older, but points out that their prices will "most likely" always be higher than like-aged vehicles for the previous year.
He adds: "The indelible mark of the recession, like rings of a tree, will always be visible in 2008 and 2009 model years."