A few years ago, a car dealer in Texas told me he had just paid more for a car at auction than he had sold it for a couple of years earlier -- when it was new.
Used-car prices were revving full-speed ahead. "Cash for Clunkers," reduction in new-car production and a crashing economy all exerted price-increasing influence on used cars.
Today, those factors have shifted into reverse.
Car prices are down 4.4 percent for the year; trucks slowed 4.9 percent.
I recently had a chance to discuss this trend, and used cars in general, with Ricky Beggs, vice president and managing editor at Black Book.
What's Black Book?
Black Book is a key way auto dealers and finance companies determine how to value pre-owned vehicles. When dealers price their cars, they factor in what they paid for the car and what they could extract in a given market.
However, like when you buy a house, they examine "the comps," or more accurately, what cars are selling for at auction.
All this gives them a fair market value buyers are willing to pay.
"Black Book has been gathering this data since 1955 -- first on a weekly basis, then on a daily basis from April 2008," Beggs said. "Our analysts physically go to wholesale auctions and gather accurate, to-the-minute data. They compile it and put it online to give dealers the latest information for buying their inventory.
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