The used vehicle market slowed once again in January, marking the fifth consecutive month of decline, according to new data from the analysts at J.D. Power Valuation Services. This may be a good time to push for a great deal.
As a result, the Seasonally Adjusted Used Vehicle Price Index declined by 2.7 points, relative to December, to 117.2. Despite the index's sharp decline, it currently sits 2.3% above January 2018's level.
Highlights from the monthly report point out:
- Wholesale Prices Decline in January
- Prices down by an average of 2.5%
- Used Vehicle Price Index Down
- Index falls for 5th consecutive month to 117.2
- New Vehicle Sales Slow
- Sales fall 2.1%, SAAR reaches 16.6 M units
- Incentive Spending Declines
- Incentives decrease by 1.9% to $3,846 per unit
"We are expecting the used market to slow in 2019 with used prices forecasted to decline by 1 to 1.5%," said David Paris, Executive Analyst at J.D. Power Valuation Services. "There should be increases in used supply once again this year along with more volatile credit conditions and increasing gasoline prices with are expected to apply pressure on the used market."
Want to get the best deal on a used car? Follow these tips:
Line up your financing. Being pre-approved gives you confidence, and takes some “maneuvering room” away from crafty dealers – who often sell you more expensive financing than what you actually quality for.
See your credit union. Credit unions have some of the best deals on used vehicle financing. They are not-for-profit institutions owned by their members. That means you. Don’t sign onto any financing until you get a quote from your CU. (Also, car dealers know that CU members are smart shoppers).
Shop, shop and shop some more. Scour your area dealers -- even if you’re set on a particular make and model. You can even play one dealer off against another.
Be ready to leave. Don’t get “sucked in” to the dealer’s sales process. Car salespeople are expert at making you feel harried, helpless and exhausted. You make a counter-offer, and it’s “I’ll have to talk to my manager” – which somehow always takes 20 minutes. And that’s one of the nicer tactics they use. Pretty soon you just want to get it all over with. Psych yourself out, and be tough. The best way to make them play your game is to be ready to leave.
Watch out for the “extras”. Dealers plump up their profits on a sale in a variety of ways. The top two are lousy financing deals (good for them, bad for you) and “extended warranties” that are often 70% profit. Other “extras” include over-priced accessories or security devices, and service plans. Dealers will even charge big bucks for the air (“nitrogen, Bob, it’ll pay for itself!”) in your tires. If you want any of these extras, negotiate hard for your deal.