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Used-car prices rise nationwide

By Tara Baukus Mello · Bankrate.com
Thursday, November 8, 2012
Posted: 9 am ET

Used-car prices are expected to increase in the near future as a result of Superstorm Sandy, according to the National Automobile Dealers Association, or NADA. The group predicts that prices for used cars up to 8 years old will jump 0.5 percent to 1.5 percent nationally in December.

The increase is due to the loss of used cars that were currently for sale, as well as an increased demand to buy a used car by people whose cars were lost or damaged due to Sandy, including those cars for which an car insurance payout was made.

In particular, NADA expects that prices for large pickup trucks will be at the high end of the projected increase. Demand for those types of vehicles will be exceptionally high since they are typically used in the construction industry, and the overall available supply of pickups was smaller than normal before the storm. The higher used-car prices will mean consumers will need to be even more diligent when shopping for a car loan to ensure they get the best interest rate possible.

While the 0.5 percent to 1.5 percent increase is expected nationally, NADA noted that prices may be even higher in areas affected by Superstorm Sandy. Import and luxury brands are likely to see the highest increases since those car types are most popular in that region, according to Jonathan Banks, executive automotive analysts for NADA's Used Car Guide.

Tara Baukus Mello writes the cars blog as well as the weekly Driving for Dollars column, providing both practical financial advice for consumers as well as insight into the latest developments in the automotive world. Follow her on Facebook here or on Twitter @SheDrives.

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20 Comments
Bdub
November 11, 2012 at 2:40 pm

Obama and the cunker program[program he created thinking it would bail out the loans to GMand chryler], started used car inflation two ayears ago,,the cost of new cars,and the fact that more used cars are exported outr of country with low are no export tax.

jrhat
November 11, 2012 at 1:30 pm

Just keep kicking them when they're down!!!!

L. Levinsky
November 11, 2012 at 12:30 pm

Maybe you ought to get YOUR facts straight Lippencott. Read the first line again. Your, "Sit back and think, how did this happen" is street colloquialism for, "as a result of Superstorm Sandy." In other words, IT MEANS THE SAME THING YOU SAID!!

As far as the rest of your statement, NOWHERE in the article does it mention it was Obama's fault. You came up with that on your own. It's that type of twisted logic people like you use and vote for him. Why dont you just drop to your knees and blow him and have it over with.

Jean
November 11, 2012 at 11:16 am

Insurance companies do buy cars damaged out from storms. The cars end up back on used car lots. My friend who used to be an Allstate agent says the cars end up on used car lots and is not right. DO BACKGROUND CHECKS ON THESE USED CARS!

Dale
November 11, 2012 at 10:40 am

When insurance companies purchase total loss cars, including flood cars,from their owners, the insurance companies try to recoup some of the loss by selling the vehicle to wholesalers who recondition the vehicles for resale. At that point of sale, the titles are "branded" typically as "salvage" "flood" etc. Dealers who sell the cars must disclose the branding on the title prior to sale or face stiff penalties if caught cheating. If you sell/trade a car with a branded title and don't disclose it to a prospective buyer/dealer, you face the same still penalties. Most lenders don't finance branded title vehicles because a true collateral value can't be established. There are some ways to protect yourself: Track down the previous owner by doing a title search through the DMV. Contact and ask the owners why they got rid of the car. Take the car to your mechanic or body shop repairman for an inspection. If the car is new enough and still under factory warranty, contact the manufacturer of the car, provide the VIN and see if the warranty is "suspended" for any reason. If so, ask why. The carmakers don't want these problematic cars back on the road either. Carfax may be an option but remember not all accidents and total losses are reported to Carfax, and the service is not free. Can you get a good car that has a "branded" title? Yes but the key is buying the car for well below the market value as compensation for the risk you're about to take. It's unlikely you'll get that kind of a price break from the dealer. Overall it's best to avoid "branded" title vehicles altogether. The phrases, "Buyer Beware" and "You Get What You Pay For" should come to mind.

robert
November 11, 2012 at 10:18 am

use a Carfax or autocheck report-if someone's car has been flooded and they get paid by their insurance company as a total loss it should show up-if they fix it themselves and try to pass it off as an undamaged car, maybe not. The car would have to be extensively repaired to be roadworthy.

marcella lippincott
November 11, 2012 at 9:42 am

hmmm. will president obama be blamed for the spike in the used car prices? gets blamed for everything else. people need to sit back a minute and think how did this happened. sandy!!!. its like when clinton was in office. hurricane charlie-spike in housing so bad people couldnt buy houses or rent them. hmmm.it stayed that way for a long long time. so u see fols president obama didnt create a lot of these problems and he inherited them. sometimes when presidents takes office situations escalate. been following this for a long long time. just like when he first was elected 800,000 people lost their jobs. didhe cause tht first day in office. like now medicaid is changing in florida for some drs. already obama is being blamed in florida for cuts when all actuality its the governor. its like telling someone even children get your facts stright before u blame little johnny or whoever.

J. Anstett
November 11, 2012 at 9:21 am

Is Disclosure required when these vehicles that were storm damaged go on used car lots making them available for purchases. especially at incresed prices?

J. Anstett
November 11, 2012 at 9:13 am

A new worry....do the cars involved in the storm wind up on used car lots? Is discloseure required.
Yikes you could be buying one of them at a too high a price.

Tommy
November 11, 2012 at 8:53 am

Hmmm sounds like another scam for the middle class, when does this kinda stuff end?