Used-car prices crash to lowest level since 2009
The U.S. auto market is at an interesting crossroads with used-car prices crashing to new lows every month while new car prices continue to defy gravity courtesy of a somewhat “frothy,” if not suicidal, lending market that has seemingly decided that anyone with a pulse is financially qualified for a $0 down, 0% interest, 80 month loan on a brand new $40,000 luxury vehicle of their choice.
As the Labor Department’s consumer-price index data showed last Friday, used-car prices once again dropped in July to the lowest level since the ‘great recession’ of 2009. In fact, since the end of 2015, the cost of used vehicles has dropped in all but three months and are now roughly 10% off their 2013 high.
Unfortunately, the outlook for the used market is only expected to get worse with the volume of lease returns expected to soar to nearly 4mm units by 2018.