Daily Auto News Report: Used Car Values Set to Spike, then Crash
Daily Auto News
If you’re thinking of selling your car, you might want to act quickly. Some industry analysts now predict that used car values are set to rise quickly, then collapse.
USA Today explains, “The popular cash-for-clunkers program, extended by Congress last week with $2 billion more in federal incentives, requires that all the old fuel guzzlers traded in are scrapped – not resold. That means up to 750,000 vehicles will never find their way into the hands of another owner. Many are at the end of their useful lives, but others, with years of life left in them, normally would be resold.” Kelley Blue Book analyst Alec Gutierrez told USA Today, “It’s going to drive prices up of some of the most affordable vehicles we have on the road.”
Dealers are reporting that the phenomenon has already begun. Don Metzner, owner of a group of Armory Automotive dealerships in Albany, N.Y., told the Wall Street Journal, “”We sold more than 80 used cars in July when we usually sell 60, and we expect to sell more than 100 used cars in August.” Some dealers, according to the Journal, “say many consumers who go into a showroom and find that their current vehicle doesn’t qualify for the program decide to go ahead with a purchase anyway, often choosing used vehicles.”
But it won’t last. Kicking Tires reports, “Once Cash for Clunkers ends, however, KBB says the value of these cars could plummet.” While it’s hard to predict when the bubble might peak, KT says, “It might be a good time to trade in your used car, which isn’t eligible for the Clunkers program, and get the top value for it.”
If you’re in the market for a new car, check out the U.S. News rankings of this year’s best cars as well as this month’s best car deals.
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