Used luxury cars will cost more

4:28 PM, Jun 29, 2012   |    comments
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(USA TODAY)  Used luxury car prices will rise this year, predicts Jonathan Banks, senior analyst with the National Automobile Dealers Association's Used Car Guide.

NADA predicts the supply of luxury used vehicles up to 5-years-old will decline by 13% in 2012 compared with a year ago. Average prices will increase 1.9% this year. Prices in the overall used-vehicle market are expected to increase 2.9% in 2012.

"The falling used supply will raise used-vehicle luxury prices again this year, but overall appreciation will be mild by recent standards," said Banks, in the NADA Used Car Guide's latest report on the issue.

Prices for luxury brand used vehicles increased 9% in 2011.

Acura will see the biggest used luxury car price rise at 4.8%, followed by Audi, 3.3%; Cadillac, 0.5%; Infiniti, 1.5%; Lexus, 1.6%; Lincoln, 2.6%; and Mercedes-Benz, 0.7%. BMW and Volvo's prices will fall slightly.

The NADA says the decline in used-vehicle supply is due to the recession when fewer new vehicles were purchased or leased. That meant fewer trade-ins and off-lease vehicles returning to the market. In 2011, mainstream brands grew 11%, but luxury sales, which had been at a breakneck pace in much of the last decade, only went up 4% compared to 2010.

"Used-vehicle prices have risen over the past couple of years because of economic conditions that lowered supply and increased demand," Banks added.

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