| -

STAMFORD, Conn. — Used-vehicle prices continued "at historical highs," in April, and while there are expectations for some slowdown during the second half of the year, the next three years will likely show continued strength in used values, according to RVI Group.

The RVI Used Car Price Index was 1.197 in April, which was up 21.6 percent year-over-year and an improvement of 1.8 percent compared to March.   

The company indicated that used prices have "shown a strong recovery and are at historical highs." 

In fact, the index has hit new highs each month since the middle of 2009, Rene Abdalah, vice president of RVI Group, told Auto Remarketing. 

What has been the No. 1 impetus for the used-car price upswing has been the fact that new-vehicle prices have risen, making used vehicles often a more attractive option for shoppers, he noted. 

Though they fell 0.3 percent from March, April's new-car prices climbed 2.4 percent year-over-year. 

While the lack of used supply has been a driver in the uptick of used prices, it's not the sole cause. 

"It's really not the lack of supply of used vehicles as the only driver, it's really that new-car prices going up is driving consumers to the used-car market," Abdalah shared.

Continuing on, for full-year 2010, the index is projected to be 1.172, which marks a 2.1-percent dip from where it stood in April, but a 12.4-percent gain from 2009.

The year-over-year increases are projected to continue through 2013, with the index being forecasted at 1.183 for 2011 (a 1-percent upswing), 1.205 for 2012 (a 1.9-percent uptick) and 1.212 for 2013 (a 0.6-percent increase).

"Compared to current levels, we expect used-car prices to weaken slightly in the second half of 2010," officials explained. "New-vehicle prices are expected to increase by 1.4 percent for 2010, but a weakening in the second half is the main cause for our projected softening in used-car prices."

They added: "Used-vehicle supply shows annual decreases for the next four years, including significant decreases in 2011 (21.9 percent) and 2012 (34.7 percent)."

Used supply for 2010 is expected to fall 3.7 percent year-over-year, and 2013 will likely see a 7.6-percent dip. 

Driving these used supply decreases are the low new-vehicle sales from 2008, 2009 and 2010, Abdalah noted. 

While the expected decrease in new-vehicle prices is likely to have negative impact on used prices, the used supply declines are likely to have a positive impact, he stated.

Price Trends in Individual Segments 

Looking at some individual segments, all 19 of the used-vehicle categories included in RVI's data showed year-over-year and month-over-month gains, but some were more substantial than others.

The full-size van category had the largest year-over-year used index increase during April, as it climbed 37 percent.

The index for minivans jumped 31.8 percent, sub-compacts were up 28.1 percent, small sedans climbed 26.6 percent, and midsize SUVs were up 25.4. Also showing gains above the market average were small SUVs (24 percent), full-size SUVs (23.9 percent), luxury full-size sedans (23.9 percent), and full-size pickups (up 23.8 percent).

Economic Trends

Looking at some overall trends in the economy, RVI suggested that there are "mixed signs toward recovery."

The first quarter saw a 3.2-percent improvement in gross domestic product. However, April's unemployment rate climbed to 9.9 percent, a 1-percentage-point year-over-year gain and a 0.2-percentage-point hike compared to March.

April's consumer price index showed a 2.3-percent uptick.

"Consumer sentiment decreased to 72.2 in April to the surprise of some after seeing a rise in consumer spending at the fastest pace seen in three years and an anticipation of greater job availability," officials noted. "Gas prices increased to $2.85/gallon in April, but have decreased to start May ($2.79/gallon for the week ending May 24)."