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NADA: Post-Sandy Demand Slows Depreciation

December 18, 2012

MCLEAN, Va. —Used-vehicle prices for cars and light-trucks up to eight years old were buoyed by Hurricane Sandy, resulting in stronger than expected prices in November, the NADA Used Car Guide reported today.

“Prior to Sandy, we expected used-vehicle prices to drop by 2.1 percent in November. But the impact of the storm and the continuing tight supply of late-model vehicles plus strong demand slowed depreciation to 1 percent,” said Jonathan Banks, executive automotive analyst with the NADA Used Car Guide.

November’s prices were within NADA’s post-storm estimate — an improvement of 0.5 to 1.5 percent or $155 higher on average than projected prior to the hurricane.

NADA predicts that the boost in used-vehicle demand caused by Sandy will also result in stronger prices in December.

“Trade-in values for compact utilities, compact luxury utilities and compact and mid-size cars will be strong in December with values either essentially flat or in certain cases higher compared to last month,” Banks added.

On the new-vehicle side of the market, December is usually a good month to purchase a new car or light truck because manufacturers typically increase incentive spending in an effort to sell as many vehicles as possible before the end the year.

“As the year comes to a close, many manufacturers are extending or enhancing already favorable special financing promotions and adding to customer cash incentives,” Banks added. “Car shoppers should find December a great month to purchase a new or a late-model, pre-owned vehicle because of the additional strength in trade-in values along with year-end promotions on many new models.”


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