Forget all the misinformation you have been reading in the mainstream media, the summer of 2011 is a good time to buy a used car.
The experts at Black Book, which tracks wholesale used car prices, have the proof that the summer of 2011 is a good to buy a used car because wholesale prices have dropped in most segments.
Ricky Beggs, vice president and managing editor of Black Book, says in his weekly video blog that the overall used-car market has declined in the past two months.
That's contrary to what you've been hearing, isn't it?
It's maddening to someone who tracks the used car marketplace because consumers are being taken advantage of. Most only know what they read in newspapers or online and don't take the added step of investigating wholesale prices.
Used car dealers can't be blamed for trying to get the most for their products. It's just unfortunate with so much information available online that consumers are paying too much for their used cars.
Black Book director of media relations Eric Lawrence put the whole used car market decline in perspective in an interview with . He said if the past eight weeks are taken into consideration and the 24 segments that Black Book tracks, there are 192 possible outcomes of weekly price changes. He noted that 183 of those 192 changes were value declines, with just nine increases. Further explaining, he said if you take all 183 of the declines and add up the dollar value, it results in a sum of $7,557. If you do the same for the nine increases, the sum is just $55.
Where Can You Save?
The only segment that showed a recent increase is the full-size crossover category. That's going to include vehicles like the Ford Explorer, Acura MDX and the Honda Pilot. These are most likely seeing increases in value because gas prices are dropping. That makes these vehicles more attractive and puts them in greater demand.
According to Black Book, each used car segment has dropped for three straight weeks. For the most recent week (ending Aug. 20, 2011) used car prices dropped $49 while trucks were down $42.
Where are you going to find your best values? Not surprisingly it is in the premium sporty car segment (think Corvettes). That segment is down because summer is winding down and so is interest in these used cars.
They're something you buy at the commencement of summer (probably even mid-spring) to enjoy them in beautiful weather. Plus, it's easier to work on them in your driveway!
Another interesting trend from the Black Book research is clean vehicle values are leveling off more than average vehicles. Now that's just a bunch of industry speak that might be confusing to the average consumer but it means that the prices of certified pre-owned vehicles are going to start dropping.
Well, they're probably not going to drop in all honesty but it should mean prices are probably not going to increase. After all, it's rare that used car prices at the retail level (i.e. dealerships) drop on certified pre-owned vehicles on a massive basis unless there is an outside factor like a massive recall on a particular brand.
What's Ahead?
What's next for the used car market? If I knew that I would be selling used cars and not writing about them. My prediction, though, is going to be a softening in the market because of something called the "jitters index."
It tracks how consumers feel about the economy. Basically, the jitters index at the highest it has been in more than 15 years. Until that number starts to drop off, consumers aren't going to be making large purchases that they can put off. People want to buy used cars. They're just not that confident.
The used car market will really start to feel the pinch in terms of supplies once the jitters index drops. That's what really could drive used car prices back up again and you'll regret not buying a used car in the Summer of 2001.