This article was originally published on USA Today, on May 27, 2015.
Used-car buyers looking for bargains can find them as long as they stick to smaller cars and minivans, and avoid SUVs and pickups, a new report says.
In the first quarter, subcompacts were selling for 2.8% less than they did a year ago. Entry-level sports had a 2.1% reduction, compact cars and minivans were down 2% and midsize cars were off 1.6%, the analysis of the used-car market by Edmunds.com finds.
Among individual models, some of the reductions have hit double digits. A small, fun Fiat 500 in near-new condition was going for 12.5% less on average during the quarter than the year before. Even the Toyota Prius C — one of the Prius “family” that became synonymous for hybrids — saw prices that were 10.1% lower.
The bargains stand in contrast to average used-car prices, which increased 7.1% to a record $18,088 per vehicle. The study looked at used cars less than five years old.
Edmunds.com analyst Jessica Caldwell says the softening of smaller used-car prices reflects a surge in leases for small and midsize cars over the past few years. When the lease terms end, many of those smaller models end up in the used-car pool.
“There’s no sign that this surge in leasing will slow down any time soon,” Caldwell says, “so shoppers can continue to expect prices of these cars to stay relatively low as they continue to flood the secondhand market in the coming months and years.”
The big demand has been for trucks. Used pickup prices were up 10% in the quarter, and SUVs saw a 8.7% boost. Prices were already strong on trucks because of the resurgent economy and comeback of construction, and now they’re being helped along by lower gas prices.
In short, the time to buy a used car is now.
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