NADAguides analysts expect both wholesale and retail used prices to increase more than expected due to a combination of soaring gas prices and the Japan earthquake tragedy.
Since the earthquake in Japan, NADAguides analysts report an 11 percent increase in prices for intermediate compact cars (Civic, Corolla, Focus, etc.), and an 8.5 percent increase in prices for intermediate mid-size cars (Altima, Accord, Malibu, etc.).
The overall market has improved by 5 percent, which is better than expected seasonal increases, according to NADAguides analysts.
NADAguides analysts see demand for compact and subcompact vehicles to continue being an issue due to low supply.
Long-term effects of the situation in Japan are unclear, but the current price increases should continue for at least the next three months, say NADAguides analysts. With projected shortages of parts, as well as a shortage of some vehicles, due to unavailable supply and production issues.
"With a tight supply of used vehicles and rising fuel prices, we really are in a seller's market,” said Troy Snyder, director of product development at NADAguides.
On the plus side, consumers have a better understanding of the 2011 gas price increases than consumers did back in 2008. Even though rising fuel prices do affect consumer behavior, NADAguides analysts don’t expect consumers will make such extreme vehicle purchases. They will consider all their long-term needs in addition to miles per gallon.
They also don’t seem to be making any rash decisions about the brands they drive, either.
Edmunds.com finds no change in consumers’ shopping behaviors, despite reports of production problems.
“Our shopping data are telling us that not even this devastating earthquake was able to shake consumer confidence in Japanese cars,” said Edmunds.com analyst Ivan Drury. “In fact, the natural disasters may actually strengthen the determination of consumers to remain loyal to their Japanese brands.”
Source: Used Car News 4/1/2011
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