Used Car Shoppers Likely to Find Best Values in Small Cars, Says Edmunds.com

SANTA MONICA, Calif., Aug. 18, 2016 -- Prices of used small cars continue to drop, even as overall used car prices soar, according to a new report from Edmunds.com, the leading car information and shopping network. Edmunds' Q2 2016 Used Vehicle Market Report suggests that the best values for used car shoppers can be found in the subcompact category, where prices are down an average of 6.3 percent year over year. Compact cars (-2.0 percent year over year) and midsize cars (-1.0 percent) also offer great value for used car shoppers who find themselves in a market where overall used car prices are up 2.7 percent year over year to an all-time high of $19,367.

"If you're a used car shopper in the market for a small vehicle, this is a great time to buy," says Edmunds.com Sr. Analyst Ivan Drury. "Prices are down for these vehicles because there is so much more demand for used trucks and SUVs. There are also lots of smaller cars coming back to the used car market as people trade up into larger vehicles. So not only are prices low on used small cars, but there's also a wide selection available."

 

Edmunds advises shoppers to be aware of other used car segments for which prices have grown significantly year over year. Prices on used compact trucks, for example, are up more than 10 percent year over year. Other used vehicle segments with notable year-over-year price increases are large traditional SUVs (+8.9 percent) and premium luxury SUVs (+7.7 percent).

 

"Demand is driving higher prices on traditional SUVs, so shoppers in the market for these types of vehicles may want to explore other options," says Drury.  "They might want to consider, for example, a large crossover SUV, which offers similar size and utility, but is available at a much better value in today's used car market."

Other insights found in Edmunds' Q2 2016 Used Vehicle Market Report include:

Best Q2 Since 2007 – The second quarter of 2016 saw 9.8 million vehicles sold in the used car market, an increase of 1.8 percent over the previous year. Franchise dealers' used sales were up 4.0 percent over the second quarter of 2015 -- its best Q2 ever.

Credit Counteracts Higher Prices – Shoppers are electing for lengthier loan terms (67 months on average) to help maintain affordability in the face of ever-increasing vehicle prices. Consumers are helped by low interest rates, which have fallen from last year.

Residual Values Dipping – Leasing has been a major force supporting new car sales over the past three years. But as the used vehicle market begins to see a higher number of lease returns, residual values are beginning to drop, which will likely mean higher lease payments for many new car lessees. 

The full Q2 2016 Used Vehicle Market Report from Edmunds can be found at http://www.edmunds.com/industry-center/data/used-car-market-quarterly-report.html.

Edmunds.com proudly offers two million used car listings from thousands of dealers across the U.S., and many of them are available with Edmunds' Used+ perks which include a free gas card, 24/7 roadside assistance and a one-month warranty. Used car shoppers can start to find their perfect car right now by visiting http://www.edmunds.com/used-cars/for-sale/.