Used Prices to Drive New-Car Sales in Fourth Quarter, NADA Used Car Guide Predicts
Above-average trade-in values could push car buyers into the new-vehicle market, predicts the NADA Used Car Guide. Japanese makes looking to recapture market share after the March 11 earthquake should also provide a boost through increased incentive spending.
MCLEAN, Va. — The NADA Used Car Guide said above average trade-in values for used cars should push car buyers into the new-vehicle market in the fourth quarter. Japanese automakers looking to recapture lost market share after the March 11 earthquake are also expected to provide a boost through increased incentive spending.
"Higher trade-in values will help facilitate new-vehicle purchases because car owners have an equity built into the deal, which they can use as a down payment," said Jonathan Banks, senior analyst with the Used Car Guide. "Higher used prices also will drive more car shoppers to choose new vehicles instead of used ones because monthly payments between a new and used purchase will be closer."
Trade-in values on many 3- to 5-year-old small cars are about 10 percent higher in September than a year ago, according to the NADA Used Car Guide. Banks believes used-car prices at the end of the year will still be higher than last year, but not at the levels during the peak in May and June when prices jumped 25 to 30 percent higher.
"We expect consumer demand for small and mid-size, fuel-efficient cars to shift from the used market to the new market in the fourth quarter," said Jonathan Banks, senior analyst with the Used Car Guide. "Automakers based in Japan will likely increase incentives to boost lost market share after the production disruptions from the earthquake and tsunami in March."
More Auto Finance

Dealerships Are Paying the Price for Extended Car Loans
Growing negative-equity scenarios mean such lengthy terms should be addressed in a forward-looking way to make them work for the dealer and the consumer down the road.
Read More →
Trade-Ins in Negative Equity Reach New Heights
As such trade-ins rise in frequency, so do monthly loan payment amounts and interest rates, according to second-quarter data compiled by Edmunds.
Read More →
Auto Credit Plentiful
June numbers show lenders are readily granting access, including to risky borrowers, as consumers leverage themselves to take on high prices.
Read More →
Automotive Consumers Sink Further in Debt
Most financing metrics hit records in the second quarter as more buyers locked themselves into long terms and high monthly payments.
Read More →
Porsche Financial Services Shifts Structure
After 36 years with Porsche, the Financial Services Chief Financial Officer Konrad Riedl is retiring, and the department is realigning its management structure.
Read More →
Tariffs Could Raise Insurance Premiums
As U.S. import tariffs affect repair costs, consumers might find it more affordable to replace a damaged vehicle, according to recent Insurify tariff analysis.
Read More →
Smaller Loans, Longer Terms
The youngest generation of car buyers is more likely to finance less expensive vehicles, more than half of generation Z consumers borrowing less than $25,000.
Read More →
New Cars a Tad More Affordable
May averages show that combined circumstances gave auto consumers slightly better buying power for the month, though average prices were up year-over-year.
Read More →
First-Quarter Sees Long Auto Loan Growth
Experian data show more consumers are tapping the method, along with refinancings, to afford buying. Meanwhile, subprime borrowers are getting more access.
Read More →
Mastering Credit Friction
In this video, Josh Krach explains how to turn credit friction into an advantage.
Read More →