Government shutdown puts used vehicle prices in tailspin - CBS46 News

Government shutdown puts used vehicle prices in tailspin

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© iStockphoto.com / Pamela Moore © iStockphoto.com / Pamela Moore

By Richard Read

Let's be honest: No one enjoyed October's federal government shutdown. Every politician worth her salt knew that the outcome was a foregone conclusion, and yet, they went through with it anyway, causing needless mayhem and panic. 

And that's not just what progressives are saying. Even the National Automobile Dealers Association -- which often leans slightly to the right -- has criticized elected officials for their actions. 

Why? Because all the screaming and shouting put a crimp in showroom traffic. Though car sales rebounded later in the month, the uncertainty caused by the shutdown made shoppers scale back on spending, at least temporarily. And as we all know, when demand drops, so do prices.

Nowhere was that seen more clearly than in the used car market, where prices fell more sharply than they had in two years. According to NADA, used car prices tumbled 3.5 percent in October -- the kind of dip not seen since October 2011.

NADA's Jonathan Banks says that the downturn in prices could've easily been prevented: "Without the drama created by federal lawmakers that resulted in the shutdown, it's likely that October's rate of decline would have been directly in line with recent seasonal norms."

The biggest losers were used midsize vans, which slipped 4.7 percent. Used luxury cars fell slightly faster than normal, too, at 3.8 percent. And even used compact cars took a hit, with prices falling 3.6 percent. The average price of a used car up to eight years old currently hovers at $15,066.

That said, the news isn't entirely bad (for dealers, anyway): used car prices are still 0.5 percent higher than they were at this time last year.

The moral of the story? If you're in the market for a used car, now would be a great time to begin looking -- especially if you live in or near a city like New York, Detroit, or Cleveland. You'll pay significantly less than you would just a few months ago.

Of course, real bargain-hunters might opt to wait a bit longer: NADA expects prices to slip another 1.9 percent before the end of the year.


This story originally appeared at The Car Connection 

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