Used Vehicle Prices Should Drop This Year

Flat new vehicle prices in 2015 will have the effect of putting downward pressure on used vehicle prices, according to a new report from the National Automobile Dealers Association.

With automakers cranking out new vehicles at a brisk pace — and offering generous incentives to get people to buy them – the price of new vehicles will be kept in check.

We should also see higher interest rates this year, as the Fed makes good on its promise to raise rates during 2015. This will further spur automakers to keep prices competitive.

NADA Used Car Guide executive analyst Jonathan Banks said that the supply of luxury compact utilities will increase by about 33% this year, which will put further downward pressure on prices in this hot-selling vehicle segment.

With an increasing supply of new vehicles, and aggressive deal-making, used vehicle trade-ins will pile up on dealer’s lots across the country. In fact, NADA is forecasting that late-model vehicle volume will increase by 8% — the result of both new vehicle sales and growing off-lease supply.

These conditions add up to lower prices on used vehicles. NADA expects to see used vehicle prices fall by 2-2.5% for the year.