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Will Used Car Prices Drop in 2014?

Used car prices have skyrocketed since 2008. At one point some used models where worth more than they were new. Granted, you can expect that from a car that is 75-100 years old, but not one that is only three years old. Well, back to the question. Yes, used car prices are projected to drop in 2014.

Tom Webb, chief economist with Manheim Used Vehicle Value Index, indicates that used car prices dropped during the final quarter of 2013, when compared to earlier in the year. While prices dropped during that quarter, they remained higher than they were during the same quarter of 2012. Mr. Webb also predicted that prices would continue to fall throughout 2014.

Used car prices have seen a spike since the twin disasters that hit Japan in 2011. Just as prices and new car inventories were recovering from those disasters. Hurricane Sandy hit the United Sates, further depleting the automobile inventory in this country. Since the automotive industry is demand dependent, used car prices shot up again. It is difficult to predict when, or even if, used car prices will ever return to their pre-2011 levels. Hopefully, the downward trend that has started in early 2014 will continue for several years.

 

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