Used-car prices on the rise

When you go to trade your chariot in with printouts in hand, from Kelly Blue Book, Nada and Edmunds, each specifying trade-in or wholesale price, the dealer will try to lowball you anyway.  See, he has another piece of information we consumers can’t easily access.  It’s called Auction prices.  The dealer wants to stay as close to the auction price as he can to minimize his loss if your car goes to auction instead of on his used car lot – or doesn’t sell.  If the dealer keeps and sells your car, of course he is going to ask retail from the next buyer.  Dealers probably make more money on used cards, getting them for lowball prices and selling it for retail prices.  That spread can be up to a couple grand.

As all the experts say, do your homework, know before hand what you will take for your used car and walk if the dealer offers a lowball figure.  And keep the used car transaction separate from the new purchase.

I'm sure this has NOTHING to do with the FACT the NEW cars/trucks cost what a Mercedes/BMW used to cost 10 years ago! 

Nor, does this have ANYTHING to do with the "Cash for Clunkers" debacle that DESTROYED perfectly good vehicles just to "spur" new car purchases.  BTW, I haven't seen one news story about the dealerships that went out of business because the government was too SLOW in paying the $$$$ for the "clunkers".  (Alas, I could NOT AFFORD a new car,  and the loss of those "clunkers" that still had thousands of miles left in them has caused the remaining junk to be "worth" much more than they should be.)

This is what happens when the government gets involved in the economy.  They have no foresight.  The scarcrow for Wizard of Oz had more of a brain . . .

I love my 1994 Chevy. It's did cost me about $600 in repairs, over the course of a WHOLE YEAR. Some people pay that much EVERY MONTH in payments and insurance. Runs and drives like new, 'cause I take care of my cars. Why in the world would I want to buy a NEW ONE?

Cash for Clunkers has almost nothing to do with higher prices on less than 7 year old used vehicles. Most of those trade-ins were more than 10 years old, and consisted of full-sized trucks and SUV's. It mostly affected the vehicles in the $3000-8000 retail range. The reduction of trade-ins and lease returns of vehicles less than 5 years old is what forcing the prices higher- and the fact that for about 10 years consumers were turning over their vehicles almost as soon as they finished paying, or almost finished paying off their last auto loan. Leasing died when low to zero percent financing, and losses suffered by banks on lower than expected residual values hammered their portfolio, and changed leasing needs on vehicles with less than a $30k price tag. Also, 2008-09 saw very little new vehicle production, ergo 4 years later, very little used product on the market.

Kelly Blue Book now is owned by Auto Trader, which is trying to get into the used car auction business. Is this a potential conflict of interest? I do know that when a customer tells me what KBB says their trade-in is worth, I ask them if KBB was ready to write a check for it.