Used car prices — already rising — could soar as buyers are driven to seek alternatives due to a predicted shortage of some new vehicles in the wake of the continued disruption of Japanese auto production, experts predict. Price increases at the wholesale level already are being seen for the compact and midsize used cars from Japanese brands and of rival models that would be the closest substitutes for the more popular Japanese new cars.
"If you have a small car and want to get rid of it, now is the time. The prices are just going crazy," says Jonathan Banks, analyst for National Automobile Dealers Association Used Car Guides. Over the past couple of weeks, the NADA pricing service says it has observed an 11% rise in the wholesale prices of 3- to 5‑year-old compacts such as the Toyota Corolla and the similar Ford Focus. Midsize cars went up 8.5%, the service says.
Trade-in values for smaller cars have already been on the rise due to higher gas prices. According to NADA, prices now could shoot up even more in the coming weeks, which is when reduced Japanese auto factory output will begin to really show up as a shortage of the more desirable models on dealers' lots.
Toyota and Nissan are not expected to get back to full production in Japan until mid- to late-April. Many Japanese plants remain closed, and several Japanese makers' U.S. plants are operating on reduced hours to conserve parts that are sourced from Japan.
Many dealers are preparing, anticipating that shoppers are likely to turn to recent-vintage used models if they can't buy what they want new. Though higher prices are bad for buyers, they're good for car dealers who have suffered through the recession.[Source: Woodyard, Chris. "Used cars could soar in value due to Japan effect." 31 Mar. 2011. Web. 6 Apr. 2011.]