Dealer News: Prices for Smaller Used Cars May Rise

Dealer News: Prices for Smaller Used Cars May RiseGas prices have affected more than just our credit cards. The trade-in value of compact and mid-size used cars are expected to peak over the next few weeks, according to Automotive News.

A senior analyst at NADA Used Car Guide made the predictions based on several factors. There is a shortage in the used-vehicle inventory for smaller cars that is indicative of rising gasoline prices and increased consumer demand for more fuel efficient vehicles. Clean, late model used vehicles with reasonable mileage are expected to command top prices.

Prices for compact and mid-sized cars rose about $300 on average from March to April, and their value has increased by 4% since the start of the year. According to Automotive News, used vehicle prices usually peak in March and depreciate through the rest of the year. This time however, because of an inventory shortage of popular models, used- car prices are expected to peak in April or May.

There have been other factors besides high demand that have contributed to the used-car shortage. The National Automobile Dealers Association (which publishes the NADA Used Car guides), attributes a portion of the used-car supply decline because of a new-vehicle shortage stemming from natural disasters in Japan. This led to a spike in demand for used vehicles and consequently the expected price increase.

As you deal with the effects of rising gas prices, and the demand for more energy efficient vehicles this summer, don’t forget to get your dealership the protection it deserves. At Dealer Protection Group, we know running a dealership encompasses a variety of operations under one roof, from selling and service to financing and insurance. There are unique risks and exposures in everything you offer, and that requires insurance specifically designed for dealerships. We are in the business of protecting your business, providing you with a broad array of dealership coverages. Contact us today for more information.

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