Why do resale values STINK lately?
We examine
Highlights from the USA Today article:
A large number of auto buyers owe more on their trade-ins than the vehicles are worth, making it tough for dealers, and expensive for buyers, to finance new purchases.
40% of new-car buyers are "upside down" with an average negative equity of $2,200. J.D. Power and Associates says negative equity for an average buyer has about doubled since 2000 to $1,200.
It's a growing phenomenon because big discounts on new cars have the effect of depressing the value of used cars, and five- and six-year loans means it takes longer for car owners to achieve positive equity in a new vehicle.
Mark Eddins of Friendly Chevrolet in Dallas estimates that 90% of his customers are upside-down, often owing $10,000 to $15,000 more than the trade-in is worth.
Guess they should be reading Auto Spies in Dallas!!!
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email andre: avoglezon@mbzlongbeach.com
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