Used cars are not fine wine. They don’t get better with age.
Yet in tandem with high new-car prices, used-car prices are soaring, too — so much so, that some used vehicles are actually appreciating in value over time, according to the latest report on used-vehicle values from KAR Global, which sells millions of vehicles annually through wholesale, dealer-only, used-car auctions.
That’s a nearly unheard-of phenomenon, outside of some seasonal variation, or in the case of specific, scarce or hot-selling models. Used vehicles are a notoriously fast-depreciating asset, especially right after they’re first sold as new. But while it lasts, a combination of high demand and relatively short supply has turned the used-vehicle world upside down.
“Average wholesale used-vehicle prices cracked the $14,000 mark for the first time ever in April and then proceeded to set new highs, above $15,000 in May,” said Tom Kontos, chief economist for KAR Global, in a recent webinar.
“This is the latest sign of the seemingly never-ending rise in wholesale values, resulting from a deluge in demand, and a drought in supply,” he said.
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