Used-car prices likely to climb 2.5% in Q1

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McLEAN, Va. –
After climbing an average of 5 percent in the first quarters of the previous two years, used-car prices showed just 1-percent sequential growth in Q1 of 2016 — an “unusually low” amount, according to J.D. Power Valuation Services.
The December-to-March change this time around? Expect something right down the middle.
The company’s latest Guidelines report — which looks at vehicles up to eight years in age — said used-car prices in March should be up about 2.5 percent from where they were in December.
As far as how that plays out over the course of the year’s first three months, expect a 1-percent month-over-month decline in January followed by growth in the next two months.
Price growth in the first quarter is to be expected, as folks tend to receive tax refund checks, J.D. Power noted. Prices then back down as the market moves into spring.
This year, J.D. Power anticipates mainstream car prices will climb an average of 3.5 percent in the first quarter, the strongest gain of any segment (which is typical for Q1).
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The firm forecasts a 3-percent rise in midsize van prices and a 2-percent rise (on average) in the price of mainstream utility vehicles.
Large pickup trucks and large utility vechiles are expected to see 1-percent gains. J.D. Power said such modest increases, again, are typical.
Luxury segments will vary; some are likely to see no change in price, while others will decline as much as approximately 2 percent. Like the trending in other segments, this reflects seasonal norms, according to J.D. Power. The most significant decline is expected to be in the luxury large car segment.