Steven Cole Smith
If near-record gasoline prices aren't enough to vex Florida motorists, this may be: The price of used vehicles is at sky-high levels and rising. So says May's Manheim Used Vehicle Value Index, a monthly analysis of used vehicle values by undertaken by Manheim Consulting, the world's largest broker of used vehicles.
The index shows prices to be at record modern-day highs. "Lower wholesale supplies and higher retail demand continue to be the driving forces behind strong used vehicle residuals," the analysis says. "In addition, wholesale used vehicle prices are also now being supported by the new vehicle market's tight inventories, steady demand, and higher net transaction prices."
Florida dealers agree: Good used vehicles are hard to find, and some consumers are traveling to other states to look for inventory.
So what's causing the spike in used vehicle prices? Several things, including a recession that has consumers wary about purchasing new vehicles, thus making a commitment to multi-year loans and higher insurance prices for a more valuable car or truck. This is also causing consumers to hang onto their current vehicles, trimming the inventory of used cars and trucks – something the "Cash for Clunkers" program already did less than two years ago.
The good news is that if you are planning to trade in a used vehicle for a new one, expect a good price for your current car or truck.
That said, Floridians are just now beginning to feel the effects of the natural disasters in Japan, where some manufacturers have forecast that they will lose the equivalent of three months' of production this year, as the factories, suppliers and their employees struggle to return to normalcy. That will mean two things to Florida consumers: smaller supplies of new vehicles, translating to higher prices.
A tight inventory will cut rebates and other financial incentives as dealers and manufacturers attempt to maintain some level of inventory, and if fewer new vehicles are sold, fewer used vehicles will be on the market. So don't be surprised if the Manheim used vehicle price index rises again over the summer.
So what can the consumer who is in the used-vehicle market do? One answer is to consider vehicles that, for whatever reason, were largely overlooked when they were new, meaning their value as used car and trucks will be lower than the top sellers. You know always-popular vehicles like the Honda Accord, Toyota Camry, Ford F-150 and Honda Odyssey will top the resale-value price list, so consider looking at some worthy competitors that remained a bit under the radar.
Here are some suggestions in six categories, and the average Kelly Blue Book (kbb.com) suggested selling private-party price, adjusted for the Florida market, for a vehicle in "good" shape with average mileage.
Minivan: Prices have always been extremely high for the gold standard in this class, the Honda Odyssey, with the Toyota Sienna not far behind. Basic Dodge and Chrysler minivans are good values if you stay clear of the really high-end options. But the bargain here may be the Hyundai Entourage. It was only built for a few years -- the company left the minivan business to Korean cousin Kia -- so Entourages on the used market tend to be attractively priced. KBB price for a 2008 Entourage: $14,595. To illustrate the point, KBB prices a comparable 2008 Odyssey at $17,515.
Convertible: It's the law (or should be): All Floridians must own at least one convertible during their residency in the sunshine state. Although the last-generation Chrysler Sebring wasn't exactly heralded by automotive media, they have proven to be durable and useful, and out rental fleets are full of them -- meaning that after a couple of years, those vehicles head to the used-car market. The Sebring convertible isn't a sports car, but it is fun with the top down. KBB price for a 2008 model: $13,100.
Pickup truck: Sure, the Ford F-150, Chevrolet Silverado and Dodge Ram rank near the top of the resale value price sheets, but the Nissan Titan is a solid alternative that might be offered at a lower price. The Titan has always come only as an extended- or double-cab model, and only with a potent V-8 engine and automatic transmission, so regardless of the model, you get a back seat and a premium powertrain. Early Titans had some brake problems, but those should have been handled under warranty. KBB Florida price for a 2005 Crew Cab: $12,700.
Near-luxury car: Kia's first attempt at hitting this market missed the bulls-eye with consumer, but the Amati was and is a comfortable, reasonably reliable vehicle that has room, decent power and plenty of luxury features. It's no Lexus, with it isn't priced like one. KBB price for a 2009 model: $15,615.
Small car: Sure, you'll pay premium prices for Honda Civics and Toyota Corollas, so you'll need to think a bit out of the box for a good car at a lower price. The Suzuki SX4 is a worthy alternative -- attractive, reasonably comfortable, reliable and, as a bonus, all-wheel-drive. KBB price for a 2007 model: $9,750.
The commercials for the all-new Dodge Durango suggest you have been wondering where it has been. It was on a hiatus – if anyone really noticed – because the last-generation model just didn't resonate. Still, it's big but not huge, comfortable and uses some dated but proven technology. KBB price for a 2006 Dodge Durango: $9,965.
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