Reason #2 to Buy a New Car in 2012

“2. High Trade-In Values

Used-car prices should remain at all time highs during 2012, which in turn means equally steep trade-in values that can be used as more substantial down payments on new models. Due largely because of a shortage of used cars, the average value of a one- to three-year-old vehicle increased from $15,000 in 2008 to more than $23,000 in 2011, according to Kelley Blue Book, which amounts to an average boost of nearly 16 percent per year. KBB predicts used-car values may further increase from four to six percent during 2012.

While exact figures weren’t available, Alec Gutierrez, Manager of Vehicle Valuation for KBB.com suggests the nation’s used-car inventory has contracted by as much as 25 percent since 2009. This results from depressed new-car sales and a rollback in leasing that followed the economic collapse in late 2008, along with automakers dialing down their sales to rental-car fleets, all of which diminished the number of used models returning to dealers’ lots. In addition, 677,000 used cars – albeit older and less-desirable models – were taken out of the market by the so-called “cash for clunkers” program in 2009.


Information from Forbes.com, Author Jim Gorzelany

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