If you’re looking for a bargain on a used car over Memorial Day weekend, you’d better be thinking small.
Prices for used compact cars were down 1.5 percent in the first quarter of 2016 when compared to same period in 2015, and subcompact cars were down 5.7 percent, according to a new report from Edmunds.com. By comparison, the cost of used cars overall increased 3.2 percent in the quarter to $18,838.
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“Low gas prices and easy credit are making SUVs—and their higher price points—are more appealing to used car shoppers, but they’re also creating a great opportunity for small car shoppers who now have a wider selection at lower prices,” Caldwell, the director of industry analysis at Edmunds.com, said in a statement. “If you’re a used car shopper and your primary objective is to get a great deal, you’d be smart to consider a compact or subcompact car.”
Source: Edmunds.com Q1 2016 Used Vehicle Market Report
Even with relatively low rates, higher used car prices have buyers continuing to stretch out their loans. The average used vehicle loan term is now nearly 67 months and has an average payment of $376 per month.
The monthly cost of financing a used car is growing more quickly than the cost of leasing a new car. Last quarter, it was just $47 per month more expensive, on average, to lease a new car than to buy a used car. That narrowing spread may lead more buyers to start leasing, according to Edmunds.
