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Old cars are worth almost as much as new ones

Kelley Blue Book says the price differential between new and used is the closest it's been in 14 years.

By Claire_Martin Aug 12, 2012 2:53AM
Chevrolet Camaro photo by ChevroletGood news if you bought a Chevrolet Camaro last year: It's worth only $126 less than the new 2013 models. According to Kelley Blue Book, this is an industry-wide trend. On average, new cars are selling for only 11.5 percent more than their year-old counterparts these days. That's the smallest gap in 14 years.

At the source of the trend is a tighter supply of both new and used cars. The average age of cars in the United States hit an all-time high of 10.8 years in early 2012. (That's up from 8.4 years in 1997.) And quality is higher, which gives drivers confidence in holding onto their cars for longer. The recession is another factor. 

The lease market (once a trusty source of used cars) shriveled up over the past few years, and high interest rates prevented new-car purchases. But also, automakers have tightened their output; fewer new cars rolling out of factories keeps resale values firm. 

The bad news, obviously, is that used-car buyers, who could traditionally expect to get better deals, are out of luck. A 2011 Toyota 4Runner might cost just $254 less than a 2013 model. And given that used-car interest rates skew higher, some actually end up being more pricey than their new counterparts in the long run. The Detroit Free Press reports that a loan on a one-year-old Honda Odyssey minivan is just $7 per month less than a brand-new one.

That said, industry experts don't expect the trend to last -- but they also aren't predicting a specific end date. Tom Kontos of used-car wholesale auctioneer Adesa told the Detroit Free Press, "At some point, something has to give."
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124Comments
John P. (jp1964)
Aug 12, 2012 2:28PM
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Why anyone would believe anything by Kelly Blue Book is beyond me. You try walking into a dealer and tell him you want a 2013 Camaro and you'll give him your 2012 and $126. He would throw you out after he finished laughing.

 

Consumers use it because of all the sources at their disposal Kelly Blue Book by far has the highest trade values.

 

If Kelly Blue Book is so accurate then why don't the banks use it when determining the value of the collateral for your loan?

TJW 2
Aug 12, 2012 2:06PM
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Thanks President Obama! Your fantastic "Cash for Clunkers" program artificially inflated the value of used cars! Now I can't afford new or used!
Compression is the answer
Aug 12, 2012 11:03AM
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if you don't pay atleast 20% less for a 1yr older car then you are a stupid purchaser.

Buyers set prices not sellers.

Unemployment at 8.3% with debt out the butt just shop around and get a good deal and let the greedy SOBs  car's sit on the lot.

BlueCollarPA
Aug 12, 2012 12:09PM
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No matter what these "experts" say about car prices, to me they fit into two categories:

 

1 - I can afford them.

2 - I can't afford them.

 

Recently, just about all of them have been fitting into category 2, so I guess from that perspective, they are identical in cost.

 

joseph dechant
Aug 12, 2012 8:48AM
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who has been smoking wackybacky ? my cars aren't being priced like that
superhowie55
Aug 12, 2012 5:16PM
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used cars are worth whatever a car salesperson can get someone to pay for them.
lippedetmold
Aug 12, 2012 11:22AM
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This is bull roar! I have been in the car business for amost 25 years and owned my own shop for 10 years......   The  only time you find a used car same or close to the same is if it is a low production car new so it is rare to find used.......A 1 year old car is going to be 20% less for sure and more in some cases...........Do not care what books or magizines say............Now nice used car with LOW miles are getting tuff to find but you still can find them. The  nice kicker for used car buyers is the rates in our area are very low like 2.89 for up to 60 months.. Good luck buyers! JB

express4
Aug 12, 2012 3:35PM
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cash for clunkers ruined used car prices, drove up the cost of used cars, and parts that the average hard working American used to be able to afford.  Example:  I went to look for a used rim, they were just a few dollars less than a new one from the dealership.  Programs like this that The President installed are ruining America and our economy.  I have faith in America they will do the right thing this November..
ALANVZ43
Aug 12, 2012 12:47PM
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  The rule is : if the price is ridiculous , you don't buy. No Used car is worth anywhere near the price of a new car. Notice also how new cars are priced. No matter what you buy  you are paying almost the sam for any model . The price fix is in. Dealers are also price fixing used cars because they can't sell enough of the new ones.

                   Remember the Housing disaster .   If the price is too High on something you find a way not to buy it. What goes up must come down.

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