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Prices of Pre-Owned SUVs Up 30%

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On: Wed, Aug 25, 2010 at 11:42AM | By: Sherry Christiansen

Prices of Pre-Owned SUVs Up 30%

In such an unstable automotive market as the U.S. has experienced in the past year, it’s difficult to predict exactly when the best time is to buy or sell a used car, but if it’s an SUV, Minivan, or Crossover that’s involved, now may be the best time to sell—not buy.

According to Edmunds.com, prices of pre-owned SUVs and Crossovers have gone up by as much as 30% since last year.  Cadillac Escalades, for example, being sold in 2010 are getting 36% more for the average sale price than buyers paid in 2009.

In a market that values vehicles that provide great fuel economy, one may think that prices for gas guzzling SUVs would be going down instead of up. On average, wholesale prices for used vehicle have decreased slightly in July as compared to record high prices in the spring.

Edmunds.com reports that the average retail price for a pre-owned Cadillac Escalade, (calculating an average price paid for all model years) was $34,715 in July, surprisingly, up 36% from the average price paid last July. Edmunds.com reports that the average retail price paid for a used Dodge Grand Caravan in July, averaged over all model years, was $15,629, up 34%.

According to Edmunds.com's senior analyst, the major factor for the increased prices is a lack of confidence in the economy which is causing a bigger percentage of buyers to purchase used vehicles. Increased demand for pre-owned SUVs, Minivans, and Crossovers is causing prices to go up because the demand out weights the supply. In fact, the latest information from Manhelm and ADESA indicates that wholesale prices have actually gone down recently, indicating that lack of inventory may be the biggest factor driving used car prices up.

In fact, the average wholesale price of a used vehicle last month was $10,060 according to ADESA. That was 2% lower than the average price in June.
“This time last year, consumers were buying fuel-efficient vehicles and trading so-called gas guzzlers,” Edmunds Senior Analyst Spina says. “Now, those who need trucks and large SUVs are buying them, but the inventory is low because there is a current shortage of lease returns and trade-ins of this vehicle type.
“Prices are indeed very high now. While this is the case, last year’s prices were low, making the gains even more dramatic,” he says.


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