The auto industry may be on the upswing, but those looking to purchase a used car may find a tough market.
According to new data from the National Automobile Dealers Association (NADA), the price of a secondhand car will rise by nearly two percent this year - after a three percent increase in 2011. The average price of a used vehicle in 2012 is expected to be $11,850 for cars and $19,050 for light trucks.
A main reason for this is that during the recession, auto manufacturers slowed their production lines, so by 2010 there were simply fewer used cars on the market. The struggling jobs market and economic uncertainty have made people to hang onto their cars for longer. The NADA reckons that the average car on the road today is 11 years old.
While the price spikes have been particularly pronounced for fuel-efficient and compact used cars (NADA expects a 2.7 percent price jump this year), the price of gas guzzlers like SUVs may increase by a smaller margin (1.4 percent) this year.
The good news is that the U.S. auto industry has emerged from the recession even stronger than before. It is producing better vehicles, and U.S. consumers are finally looking to buy new cars and trade in their older models. The NADA expects sales of 13.9 new cars in 2012, compared to 12.8 million last year.
Photo: Flickr/Alden Jewell