Stricter leasing terms are propping up the used-vehicle market, according to Edmunds’ first-quarter Used Vehicle Report.
Average used-vehicle prices hit a record-breaking high of $20,247, compared with $19,700 in the same prior-year period. Edmunds’ research attributes the increase partially to “the return [to market] of a record volume of vehicles leased in 2016,” the report noted.
Average mileage on used vehicles dropped to 51,000, compared with 60,500 in 2013, mostly due to tighter mileage allotments on leasing contracts. Vehicles returning to market have, overall, less wear and tear — two out of three used vehicles sold in the market are four years old or newer, the report said.
In fact, used-vehicle prices have increased 17.4% in the past five years. By comparison, new-vehicle prices increased 14.7% in that same time period.
In addition, these off-lease vehicles sport features rarely seen in the used-vehicle market before — such as Bluetooth capabilities, backup cameras, and keyless ignition — which further bolster vehicle prices and tighten the gap between new- and used-vehicle prices.
In addition, SUVs continue to retain their popularity, commanding 48% of sales in the first quarter. SUVs also have better residual values compared with the rest of the market, which also boost average prices, the report noted.
