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Kelley Blue Book urges buyers to look at used cars

Used-vehicle values are expected to increase by up to 6 percent early in 2012

By Kylie MalstromPublished: December 08, 2011 01:15 PM

Kelley Blue Book, an Irvine-based provider of used and new car information, is encouraging car shoppers to buy a used vehicle before the end of the year. The company reports that values for pre-owned cars are expected to increase 4 to 6 percent in early 2012.

October saw the value of used cars drop 2.6 percent, the fifth consecutive month of declines. Values peaking in June and have dropped 10 percent overall since. The most significant decline was the 20 percent fall in value of fuel-efficient vehicles. Things are expected to change now that new-vehicle inventory levels, especially for Japanese automakers, are returning to normal and fuel prices have dropped.

"Considering the already significant declines in used-car values since June, Kelley Blue Book predicts that values will decline an additional 3 to 4 percent by the end of the year," said Alec Gutierrez, manager of vehicle valuation for Kelley Blue Book.  "Used-car values typically decline through the fourth quarter due to a seasonal drop in demand that lasts through the holiday season. We believe sales volume also will decline through the remaining fourth quarter, similar to years past, and as a result values will likely remain soft through year-end, with few exceptions."

Kelley Blue Book analysts believe that values, expected to decline further in the fourth quarter, will pick up in early 2012. One of the reasons driving the turnaround, Gutierrez said, is that more owners are likely to keep their

"Since 2009, used-vehicle registrations in the first quarter have increased by 15 to 20 percent on average from the preceding fourth quarter, and since we expect a similar increase in demand in 2012, a lack of supply will likely put upward pressure on values early in the year," said Gutierrez.  "Since we expect fewer leases and trade-ins replenishing supply, values will likely increase across the board as supply struggles to keep pace with demand."

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Readers Feedback:

There is a huge demand for the used cars it is going to be higher in the first quarter of 2012
Comment at 12/14/2011