New KBB Study Finds Used Car Market Values Could Be Heading Up

By Editors on November 25, 2009 11:58 AM
According to the latest research compiled by Kelley Blue Book, the demand for used vehicles in the U.S. is growing at a time when the supply is not, a situation that's expected to put upward pressure on their valuation -- which has already risen by eight percent on average compared to one year ago. Good news if you're looking to sell, not so much if you're hoping to buy a primo pre-owned vehicle at a bargain price. The November Blue Book Market Report found that in addition to hammering new car and truck sales, the still-grim economic conditions and rising unemployment stats are motivating ever-larger percentages of consumers to hold on to their existing rides for longer periods of time and to avoid shorter-term leases in an attempt to minimize -- or at least stabilize -- monthly vehicle outlays. A recent Kelley Blue Book Market Intelligence study found over half of the car shoppers planning to keep their next vehicle for at lease six years and possibly longer. This new buy-and-hold thinking coupled with sizable reductions in manufacturer fleet sales are combining to put at least a short-term squeeze on the availability of high-grade used cars and trucks. While the KBB research also found that overall values have remained relatively unchanged during the past several months, that situation is highly dependent on maintaining the current supply/demand conditions. One potentially mitigating factor in play here involves the impact of a sizable cache of vehicles that will come off lease during the fourth quarter of 2009. These potential market-moving entries reflect transactions that took place during 2006-2007, when financing was easy and auto industry sales were some 35-40 percent above their current levels.
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