CarSeekBlog

Even though new car dealers across the nation were offering big incentives to buyers last month, in a successful effort to increase sales, values of used cars and trucks were not hurt.

Figures from ADESA Auction, Inc. show that the average used vehicle in March, 2010 was 7 percent higher than the average price in March 2009, and 4 percent higher than it was two months ago. The average price, in dollars, was $10,549.

According to an article in Automotive News, the Manheim Used Vehicle Value also improved in March, increasing 13 percent over March 2009’s index of 106.1, to 119.9, which is also an improvement over February 2010’s index of 118.1.

Manheim’s chief economist, Tom Webb, said that the March prices were higher than he expected. Typically, he explained, every $1,000 in incentives on a new vehicle reduces the price of a used, currend model year version of the same vehicle by roughly $750, but because inventories of new vehicles are fairly low, used vehicle prices are staying high. “To the extent that dealers are not pushing new vehicles at the expense of used, you can keep both prices up,” Webb said on Wednesday, in a conference call with analysts and reporters.

Prices in March, Webb added, were improved by the low supply of recent-model used vehicle, and increased retail demand thanks to larger than usual tax refunds. In addition, there is an improving labor market, and credit availability, which also helped. Webb also said values of used Toyotas did not increase as much as their competitors, but they also didn’t decline, this despite near-record incentive spending by the troubled Japanese automaker.

Overall, sales of new vehicles were improved 24% over March of last year.

Filed under: Buying Trends, Economy, Used Cars by Mel