Thursday, Jan. 17, 2013, 01:58 AM UPDATED 2:52 AMBy Sarah Rubenoff
STAMFORD, Conn. -
As 2012 came to a close, wholesale values were on the rise, driven by the affects of Hurricane Sandy and increased demand.
Seasonally adjusted on 2- to 5-year-old vehicles, prices in the lanes rose by 1.8 percent month-over-month this past December, according to the latest RVI Market Update.
And on a year-over-year basis, prices were up 5.7 percent this past month.
RVI officials are attributing this price spike in part to damage caused by Hurricane Sandy, “resulting in an increased demand for used vehicles and a decrease in supply as consumers did not have a trade-in at time of purchase.”
Overall, there were over 250,000 vehicles lost due to the storm.
But this price hike is not expected to continue.
“Used-car prices are expected to decline in 2013. Supply is expected to increase throughout the year, which will contribute to the decline in used-car prices, although supply will still remain at low levels (historically speaking),” RVI Group’s Rene Abdalah told Auto Remarketing.
Also, Abdalah explained he doesn’t expect the impact of Hurricane Sandy on the used market to last for much longer.
“Dealers should find it a little easier to find used cars. Hurricane Sandy has had an influence on the automobile industry, but impact from the storm should be minimal as most consumers have replaced their vehicles by now,” he said.
And the smaller segments, in particular, saw rates rise during the last month of 2012.
For example, compacts (3.3 percent) and small sedans (2.5 percent) saw increases above the market average from a month ago.
Sports cars, dropping 0.9 percent, was the only segment that showed a drop in prices from November.
And what are the factors pushing prices up on used small cars?
“Low supply continues to be the main factor positively impacting prices on used small cars, particularly in the compact segment,” Abdalah explained.
RVI also provided the following charts to illustrate its points: