Unless you're trying to sell a small, fuel-efficient compact, you'll probably find it hard to sell your used car and get less money than you think its worth. The Manheim Used Vehicle Index, an industry measure of car values, fell again in May, especially for trucks and SUVs.
Wholesale used vehicle prices, on a mix, mileage, and seasonally adjusted basis, have now fallen in seven of the past eight months, resulting in a year-over-year decline of 6.3 percent. The May Index was 107.5, down from 114.2 in May 2007.
For people trying to unload their gas guzzlers, the news in May was especially discouraging. Continued increases in gasoline prices, and little clarity as to where the peak may be, pushed prices for both fullsize SUVs and large pickups sharply lower in May.
Wholesale prices for large pickups, already hammered by fuel costs and a shrinking construction industry, were driven even lower because dealers have some many new gas guzzlers they're trying to unload, many with attractive incentives.The average prices of a used SUV was down 24 percent from May 2007, while full sized pick-ups were selling more than 21 percent below last May's average price. The price of compact cars, meanwhile, is up 5.8 percent.
"For those consumers still willing to buy, lenders are making it increasingly difficult," Manheim Consulting, author of the report, said in a statement. "The Federal Reserve Board's April survey of bank loan officers showed no slowdown in the rate at which lenders are tightening credit. This was true whether borrowing was for equity lines, credit cards, commercial, residential, or consumer loans."
For non-credit card consumer loans, a record 44% of banks reported a tightening in lending standards over the past three months. That tightening came in one or more of the following ways:
• 41% widened the spread between their cost of funds and loan rates;
• 37% demanded higher consumer credit scores;
• 35% reported an increase in their turndown rates;
• 27% required larger down payments; and,
• 9% lowered the maximum maturities of their loans.
The tightening of auto lending standards has been even more dramatic for non-bank lenders because they are more dependent on the asset-backed security market as a source of funds, the report says.
-->-->