Vehicle depreciation rates on the decline
Posted on Friday, February 17, 2012 at 8:41:25 AM
New auto industry conditions have turned the old staples upside down. While a 10 year-old vehicle was once only good enough for teenagers, it has now become the family ride because modern cars are built to last up to 100,000, 200,000 or even 300,000 miles.
Cars historic depreciation rate is even on the decline, and as a result, vehicles are worth more. Used car prices are up 1.6 percent off their highest value since 1995, reports TheStreet.com, which means now is the best time for consumers to cash in and survey their auto financing options.
"The average age of vehicles on the road today has been increasing not only due to improvements in the quality of vehicles produced in the last 10 years but it has also been driven up by the sharp reduction in new vehicles sales since 2009 reducing used vehicle supply," says Alec Gutierrez, Kelley Blue Book senior market analyst. "Since we expect the supply of used vehicles to remain limited through at least 2012, these vehicles are likely to depreciate only minimally as time goes on."
Consumers can get a great deal by turning in their vehicle, receiving a higher return, turning around and going cash and auto financing in hand to purchase a different car. According to Manheim Consulting, some cars such as the Toyota Camry, Honda Accord or Ford Fusion will make a consumer 4.7 percent more turning in now than they would have last year.
The used car industry is undergoing changes and a consumer may be able to cash in.