The Used Car Opportunity

Last spring in Retirement Watch I pointed out that used cars were becoming a better deal than new cars, and that used cars were about to become more attractive. There are a lot of car leases expiring, and those cars are coming on to the used car market. There’s a flood of used cars that’s reducing their prices. As this article points out, more people are noticing the trend, and it’s hurting new car sales. If you’re looking to buy a car, take a look at the used cars, especially luxury cars, from expired leases.

The NADA Used Car Guide’s price index dropped about 4 percent last year from 2015’s average, the first significant decrease since the recession. The boom in cars and trucks coming back off leases will continue into 2017, rising about 9 percent, J.D. Power estimates.

The impact of falling used prices has also hit Hertz Global Holdings Inc. The rental-car company replaced its chief executive officer last month, weeks after cutting its annual earnings forecast due to the falling value of its cars.