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NADA Used Car Guide Predicts Used Luxury Price Hike

Though not expected to show as steep of an uptick as the overall used market, the prices of luxury used vehicles will likely climb nearly 2 percent this year, according to NADA Used Car Guide senior analyst Jonathan Banks.

The projection for this 1.9-percent price uptick is spurred by the significant swoon in supply for these vehicles, as NADA forecasts a 13-percent drop for 2012 in the number of luxury used units up to five years in age.

However, this used-price increase for luxury units would be less than the 2.9-percent increase anticipated for the overall used market, analysts noted. Not to mention, the increase in luxury used-vehicle prices was even more significant (up 9 percent) in 2011.

"The falling used supply will raise used-vehicle luxury prices again this year, but overall appreciation will be mild by recent standards," Banks explained in the NADA Used Car Guide's "2012 Special Analysis: Luxury Brand Trends and Used Price Forecast" report.

Breaking it down by luxury brands, Acura is likely to show the heaviest year-over-year increase in used prices at 4.8 percent, followed by Audi (3.3 percent), according to NADA.

Lincoln's used prices are expected to jump 2.6 percent, with Lexus climbing 1.6 percent and Infiniti up 1.5 percent.

There will likely be a 0.7-percent rise in Mercedes-Benz prices and a 0.5-percent hike for Cadillac. BMW (down 0.2 percent) and Volvo (down 3.1 percent) are the only two in the analysis forecasted to decrease.

Sharing some historical context, analysts explained that the 2007-2009 economic recession's fallout in new-vehicle purchases/leases pushed the current used-supply shortage, as trade-ins and off-lease numbers fell sharply.

Eventually the market began turning around, and last year, non-luxury new-vehicle sales jumped 11 percent year-over-year with luxury sales climbing 4 percent.

But the impact on used pricing was certainly evident.

Between 2009 and 2011, used luxury vehicle prices jumped 22 percent, NADA Used Car Guide indicated, and they remain "at historic high levels."

"Used-vehicle prices have risen over the past couple of years because of economic conditions that lowered supply and increased demand," Banks emphasized.