McLEAN, Va. — Trade-in values on used cars are expected to peak over the next few weeks, said Jonathan Banks, executive automotive analyst with the National Automobile Dealers Association (NADA) Used Car Guide.

“While prices for all used-vehicle segments will remain stable over the next two months, compact and mid-size cars will appreciate in value and outpace other segments because of rising gasoline prices, shortage of inventory and strong consumer demand for fuel-efficient vehicles,” Banks said.

Used values for the compact and mid-size car segments grew by an average of $300 or 2.6 percent from March to April, and values have grown by an average of $500 or 4.3 percent since the start of the year, according to the NADA Used Car Guide.

Source: NADA Used Car Guide

“The most advantageous time this year to trade in a used car will be April through May because values will be higher,” Banks added.

Another factor that has contributed to the dramatic rise in used-vehicle prices over the past year has been an inventory shortage of popular models resulting from fewer off-lease vehicles returning to the market and fewer trade-ins.

“The ongoing decline in the used-vehicle supply that began in 2009 has made it challenging for new-car dealers to consistently stock reliable, well-maintained used vehicles,” Banks said. “This means that dealers will be aggressive with trade-in offers for used vehicles that are in high consumer demand.”

NADA estimates that the used supply of vehicles under five years in age has declined by 14 percent since 2009.

“Clean, late-model used vehicles under six years old with reasonable mileage will command top dollar,” Banks said.

The NADA Used Car Guide is forecasting that used-car prices will decline in June and the rate of decline will pick up over the second half of the year. Prices in June will be about 0.5 percent less compared to April; and July’s prices will be about 1.5 percent less compared to April.

“Over the past few years, the auto industry has gone through automaker bankruptcies and restructurings, a challenging economic environment and natural disasters which have resulted in significant seasonal volatility,” Banks said. “Last year, used vehicle prices remained high through July because of a new-vehicle shortage stemming from the natural disasters in Japan, which led to a spike in demand for used vehicles. This year, used-vehicle prices will return to a more normal seasonal pattern.”

About the NADA Used Car Guide

Over a 79-year history, the NADA Used Car Guide has earned its reputation as the leading provider of accurate vehicle valuations and auction data. NADA offers a wide range of vehicle values, including those for used passenger car, light-duty and commercial truck, motorcycle, classic car and many more specialty vehicles. Available in a variety of delivery methods, NADA’s products and services are used daily throughout the auto, finance, fleet-lease, government and insurance industries. For more information, visit www.nada.com/b2b.

The NADA Story

The NADA story began in 1917 when 30 auto dealers traveled to the nation’s capital to convince Congress not to impose a luxury tax on the automobile. They successfully argued that the automobile is a necessity of American life, not a luxury. From that experience was born the National Automobile Dealers Association. Today, NADA represents nearly 16,000 new-car and -truck dealers, with 32,500 franchises, both domestic and international. For more information, visit www.nada.org.