Declining auction prices signal better deals on used vehicles

With overall auction values for used cars hitting a 3-year low in May, this is a good time for shoppers to ponder stepping into a late-model pre-owned vehicle. While sports cars, mid-size pickups, subcompact models, full- and mid-size SUVs and minivans have bucked the trend enough to stay above their respective auction price levels over the past five months, every other segment has seen a decline since the start of 2013. In commenting on the situation, KBB.com’s Senior Market Analyst, Automotive Insights, Alec Gutierrez noted: “This year started at a three-year high, but with no strong appreciation in Q1, auction values began an early decline in April and since have declined below levels seen in 2012 and 2011. We expect this depreciation to continue through the remainder of the year, with year-end values no more than 3 to 5 percent below where they ended in 2012.” That situation should give potential buyers a bit more negotiating leverage when it comes time to deal.

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Despite their continuing popularity, auction values of mid-size sedans have dipped by 6.2 percent on the year. Gutierrez points out this early and significant downward trend could be the result of a high volume of lease returns flooding the auctions, with that influx led by the Nissan Altima, Honda Accord and Toyota Camry. Full-size sedans exhibited a slightly lesser decline, losing 3.9 percent of their comparative auction values through May after peaking in early April. Save for full-size SUV/Crossover models, the Luxury segment also took a modest hit, dipping by 1.0 percent. Surprisingly, even used full-size pickup trucks have seen their relative values fall by 2.6 percent, a change Gutierrez largely attributes to heavy incentives on new truck sales as well as the launch of the new-generation Chevrolet Silverado and GMC Sierra. The sole exceptions are the redesigned 2013 Ram pickups and to a far lesser extent, the Toyota Tundra.

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While the stability of fuel prices has been welcome news to most consumers, it’s had a severe downside impact on hybrids, which saw their retained values plummet by 8.9 percent since January 1. Even so, they’re still expected to outperform their pure-electric counterparts. KBB.com’s latest Automotive Insights data indicates that on average, EVs retain about 55 percent of their Manufacturer’s Suggested Retail Price compared to 74.3 percent for hybrids and a 68.2 percent average for the entire vehicle market.

You Should Also Know…

Cadillac has upgraded its Certified Pre-Owned program benefits

New Mazda Certified Pre-Owned program adds 3-year buyback protection

Nissan has dropped prices on seven of its 2013 models