The latest vehicle valuation reports from both J.D. Power and Edmunds show that current conditions are creating a strong buyer's market. If you're looking for a used vehicle, now could be a great time to buy one.
J.D. Power Valuation Services' Findings
J.D. Power Valuation Services (formerly NADA Used Car Guide) is a leading provider of car values for the auto industry. Their May 2017 Used Car and Light Truck Guidelines Industry Update report found that wholesale used vehicle prices fell by an average of 1.5% in April.
In addition, the report found that:
- Their used vehicle price index fell by 0.4% in April.
- New car sales declined by 4.9%.
- Car dealers were handing out more incentives, as incentive spending per-unit increased by 13.6%.
J.D. Power also projects wholesale used car prices to decline 1% in May, 2% for June, and around 6% for the year.
Edmunds' Findings
Meanwhile, the findings from Edmunds latest Used Vehicle Market Report echoed those of J.D. Power's. Edmunds' found that falling residual values and a growing number of off-lease vehicles being returned to dealerships is fueling a buyer's market for used cars. In fact, they call it "one of the strongest buyer's markets in recent memory."
Thanks to a rise in the popularity of leasing over the last three to four years, the market is facing a flood of nearly-new models hitting car dealers. Edmunds says this is changing the face of the used-car market. The results are widespread.
- Used vehicle shoppers should be able to find a large amount of reasonably priced recent model used vehicles to choose from on dealer lots. In the first quarter of 2012, 41% of used vehicles sold by dealers were three years old or newer. In 2017, this figure has jumped to 53%.
- This is putting more pressure on new-car sales, causing automakers to offer incentives in order to move more new vehicles.
- With a market shortage of used vehicles six years old and older, these vehicles are retaining their value better, allowing buyers to receive higher prices on their trade-ins.
What This Means for Car Shoppers
Both J.D. Power and Edmunds are reporting that newer used vehicle prices are on the decline. The staggering amount of off-lease vehicles coming back into the market is also creating widespread availability of nearly-new used cars.
So, not only should buyers be able to take advantage of great pricing, there should be a wide variety of models to choose from as well, which is why Edmunds is calling it a strong buyer's market.
In addition, it may be possible to even score a deal on a new car at the moment. New car sales are softening, and automakers are upping incentives as a result.
So, whether you are in the market for a new or used car, these reports indicate it's a great time to get out there and explore your options on dealer lots.
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