Moody’s Foresees Used Prices Stability Featured

By Staff Writer March 12, 2018

Used car prices will stabilize over the next three years, according to the Moody’s Analytics Used Car Price Outlook.
Off-lease volumes will continue to rise, yet at a decreasing rate, giving dealers a better chance to adjust to the higher volumes.
This trend, together with tightening credit standards among lenders, rising interest rates, and attractively priced, high-quality used inventory will cause consumers to seriously consider alternatives to buying new cars, stimulating demand for used vehicles and supporting prices through 2019. Moody's Analytics forecasts that the used car and truck Consumer Price Index will post a year-over-year decline of 1.07 percent in 2019, slowing from a 3.63 percent decline in 2017, before prices reach bottom in 2020.
The Moody’s Analytics AutoCycle model predicts that average 3-year-old light truck and SUV residual values will decline steadily to 50 percent from 56 percent of list prices over the next three years, while car residual values are expected to rise to 49 percent from 47 percent of list prices during the same period.
This means prices between these two major segments to converge as downward supply forces switch in the coming years, equilibrating the market by the end of the decade.

Last modified on Monday, 12 March 2018 21:48