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Used-Car Prices in U.S. Down 17%
The average price of a used car in the U.S. has dropped to $15,300 from $18,400 2 months ago, according to car market analytics company Black Book.
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The average price of a used car in the U.S. has dropped to $15,300 from $18,400 2 months ago, according to car market analytics company Black Book.
That 17% drop compares with a average 9.5% depreciation rate in 2014, Bloomberg News reports. The reason: A glut of vehicles, fueled by seven years of booming new-car sales, is now pouring into the used-car market.
The flood is depressing both new- and used-car prices. That’s good news for buyers or new and used cars. But it also means a rising proportion of the 108 million people in the U.S. who are currently trying to pay off car loans today owe more than their car is worth. The situation signals more repossessions, which will dump even more used cars onto the market.
Bloomberg cited data from online car service Cargurus.com, which says the average depreciation on a 3-year-old car is 34% from its original sticker price. That compares with a 26% depreciation rate five years ago.
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