Used-car prices fall as auctions stuffed with late model supply

Used-car prices fall as auctions stuffed with late model supply

NADA Used Car Guideês seasonally adjusted used vehicle price index fell for the fifth straight month in April to its lowest level in more than five years. Not surprisingly in light of the new-car market, the main problem was passenger cars.

Subcompact cars fell the most, by 4.3 percent, nearly double the 2.3 percent loss averaged by the next two segments, compact and midsize cars. Luxury large car prices fell by 2.1 percent. Among new cars, luxury large car prices have plunged by 21 percent year to date.

Prices for used compact utilities fell by 1.2 percent in April, mainly because of a robust supply of late models. Compared with fourth-quarter 2015, subcompact car prices are 3.3 percent lower and compact car prices are down 2.6 percent.

NADA Used Car Guide expects used-car prices to fall by 2.5 percent to 3 percent in June and July, and sticks with its earlier forecast that used prices will be down 5 percent to 6 percent for the year. That would be one of the sharpest drops in a non-recession year in the past 20 years.