Glut of trade-ins drops used car prices

Pricing for used cars is easing a bit, and new cars are the reason.

A sustained rise in new car sales has boosted the supply of late-model used cars. Why? Because now there is a fresh, new supply of traded-in vehicles.

More supply means prices can drop. They're down 2.1% from a year ago at the wholesale level, says Adesa Analytical Services.

It's the latest bit of good news for used car shoppers, and it caps price drops in the 4% range all summer, Adesa said. September's drop represents less relief, but prices are still falling. Large cars, vans and full-size SUVs bucked the trend with price increases in September, but small and midsize cars saw modest drops. Midsize and large crossovers (down 5.1%), luxury cars (down 5.9%) and midsize SUVs (down 11.2%) saw the largest drops.

That's not to say used car prices are back to pre-recession levels, or will be anytime soon. In September, the Used Vehicle Value index from Manheim, a wholesale auction house for used cars, remained a few points below its 2011 highs, but it still outpaces any level before April 2010.