Used car prices have been on the rise in recent years, but numerous analysts have predicted they may decrease as the years go on. However, the National Automobile Dealers Association (NADA) recently revealed that luxury used models are expected to become more expensive as the year goes on.
The chief reason for the expected price increase is a decrease in the supply of five-year-old vehicles by approximately 13 percent compared to a year ago. Overall, prices are projected to rise by about 2 percent.
"The falling used supply will raise used-vehicle luxury prices again this year, but overall appreciation will be mild by recent standards," said Jonathan Banks, senior analyst with the NADA Used Car Guide. "Used vehicle prices have risen over the past couple of years because of economic conditions that lowered supply and increased demand."
Some luxury brands will likely increase more than others. Acura, Audi, Lincoln and Volvo will all experience sharper price increases than the 2 percent averages. Of the major luxury brands, only used BMW prices are expected to shrink, by 0.2 percent.
With prices on the rise, many drivers will elect to hold onto their current vehicles. Investing in scheduled maintenance can ensure drivers keep their current cars on the road.