Used car prices have reached a four-year low and may just keep dropping, a new study says.
New-car buyers are filling showrooms, and many of them may trade in their used cars with expiring leases, USA TODAY reported.
On average, a used car sold for around $15,600 at a franchised dealership in the third quarter, the outlet reported. The figure is the lowest since the same quarter in 2009, when used cars sold for about $14,800 on average, according to an Edmunds.com analysis.
As prices fell through most of the year, the third quarter average dropped 2.8 percent from the second quarter and 0.9 percent from the same quarter year-over-year.
While prices jumped slightly in October, overall the trend is for lower prices on used vehicles, said Tom Kontos of Adesa Analytical Services.
The fall in price is mainly due to new-car sales, leased cars that return to the lot and a stronger economy. New-car sales are also rising and could exceed 15 million, which means a large amount of trade-ins from buyers.
"New cars automatically bring some used cars out of the woodwork," Kontos said.
Leased cars are also making a return to be sold as used cars. Since cheap lease deals have been plentiful in the last few years, drivers who were uncertain or couldn't make a purchase payment could be talked into getting new cars.
"There was a big rise in leases," said Richard Arca, senior pricing manager for Edmunds.com. Now, "we're seeing the result."
The gradually recovering economy has also fueled the drop in used car prices. Drivers who made do with their old cars during the recession are finally caving and buying newer, used cars. Lower unemployment rates, low auto loan rates and loan availability all make it easier to buy a used car.
Experts say used car prices could drop even further if buyers can hold out.
"The used-car market, in terms of pricing, is poised for further softening," Kontos said.
See Now: OnePlus 6: How Different Will It Be From OnePlus 5?
