Make us your home page
Instagram
Autos | Finding a ride

Used car sales may be good sign for U.S. automakers

Economic uncertainty, tighter credit standards and stronger warranties on nearly new vehicles are luring price-conscious, credit-squeezed consumers away from new cars and trucks to used ones.

Last year, more than 13 percent of new car shoppers left dealerships with a certified used vehicle instead, up from 8.3 percent in 2003, according to CNW Marketing Research in Bandon, Ore.

While new car sales are expected to decline to as low as 10.1 million this year, from dismal sales of 13.2 million in 2008, CNW is forecasting used vehicle sales will grow through 2012. This year, the firm forecasts used car sales of 40 million, up 9.5 percent from 2008's weak volume of 36.5 million.

• • •

Strength in the used car market is a good sign for the battered new vehicle market, which has forced Detroit's automakers to close plants, lay off workers and seek federal assistance.

Historically, strong used vehicle sales eventually translate into improved new car sales.

There are several reasons.

Higher used car prices mean better trade-in values for consumers. They also can make new models a better relative value.

What's more, higher resale values for used cars also mean improved lease rates for the future. Lease rates are based on the estimated future value of a vehicle. So, the higher the expected future value, the lower the lease rate.

Dealers who've been struggling with plummeting new vehicle sales are increasingly turning to used cars to help support their businesses. Dealers know they will make a bigger profit on selling a 2- or 3-year-old car than on selling or leasing customers a new one.

Edmunds.com market analyst Joe Spina attributes this to "imperfect information" in the used vehicle market.

"Any consumer can go to our Web site and see what the dealer paid for a new car," Spina said. "There's no easy way to know what they paid for a used car at auction."

Tips for buying used

• Certified preowned vehicles usually have a warranty, but might be priced higher than a generic used vehicle.

• Order a vehicle history report.

• Have an independent mechanic evaluate the vehicle.

• Shop online to explore the best financing options in the market. Also explore credit unions for a better financing deal. Know that dealers have many attractive financing options for customers with a credit score of 700 or higher.

Used car values

Kelley Blue Book: www.kbb.com

Edmunds.com: www.edmunds.com

National Auto Dealers Association: www.nadaguides.com

Check car history

Carfax: www.carfax.com

Auto Lemon Used Car History Check: www.is-it-a-lemon.com

Car Detective: www. cardetective.com

Used car sales may be good sign for U.S. automakers 04/22/09 [Last modified: Wednesday, April 22, 2009 5:30pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Detroit Free Press.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. To catch a poacher: Florida wildlife officers set up undercover gator farm sting

    Wildlife

    To catch a ring of poachers who targeted Florida's million-dollar alligator farming industry, state wildlife officers created the ultimate undercover operation.

    To catch a ring of poachers who targeted Florida's million-dollar alligator farming industry, the Florida Fish and Wildlife Conservation Commission set up an undercover operation. They created their own alligator farm, complete with plenty of real, live alligators, watched over by real, live undercover wildlife officers. It also had hidden video cameras to record everything that happened. That was two years ago, and on Wednesday wildlife officers announced that they arrested nine people on  44 felony charges alleging they broke wildlife laws governing alligator harvesting, transporting eggs and hatchlings across state lines, dealing in stolen property, falsifying records, racketeering and conspiracy. The wildlife commission released these photos of alligators, eggs and hatchlings taken during the undercover operation. [Courtesy of Florida Fish and Wildlife Conservation Commission]
  2. CBO analysis: 23 million would lose health coverage under House-passed bill

    National

    WASHINGTON — The Republican health care bill that passed the House earlier this month would nearly double the number of Americans without health insurance over the next decade, according to a new analysis by the nonpartisan Congressional Budget Office.

    Demonstrators protests the passage of a House Republican health care bill, outside the the Capitol in Washington, on May 4. The House took the unusual step of voting on the American Health Care Act before the Congressional Budget Office could assess it. That analysis was released Thursday and it showed the bill would cause 23 million fewer people to have health insurance by 2026. Many additional consumers would see skimpier health coverage and higher deductibles, the budget office projected.
  3. Florida Specialty Insurance acquires Pinellas Park's Mount Beacon Insurance

    Banking

    Tens of thousands of homeowners who were pushed out of Citizens Property Insurance for a private carrier since 2014 are finding themselves changing insurance companies yet again.

  4. Marijuana extract Epidiolex helps some kids with epilepsy, study shows

    Health

    A medicine made from marijuana, without the stuff that gives a high, cut seizures in kids with a severe form of epilepsy in a study that strengthens the case for more research into pot's possible health benefits.

    An employee checks a plant at LeafLine Labs, a medical marijuana production facility in Cottage Grove, Minn. [Associated Press (2015)]
  5. St. Pete Economic Development Corporation lures marketing firm MXTR to town

    Economic Development

    St. Petersburg Economic Development Corporation has lured its first big catch to St. Petersburg — MXTR Automation. The digital marketing company announced Wednesday that it will fill 20 "high-wage" creative positions within the next 18 months, as well as open an office in downtown St. Petersburg this year.