Prices up for used cars

May 19, 2011 3:31:03 PM PDT
If you are thinking of selling your used car, good news -- prices are up! Of course if you are planning to buy a used car the news is not as good. Beyond the obvious, the spike in used car prices means used car buyers really need to be careful if they spot a deal, because that cheap used car could be an expensive headache.

Matthew Staley just hit the jackpot. He's selling one of the most sought-after used cars at a time when used car prices are on the rise.

He said, "It is a 2010 Prius and it actually has 56,000 miles on it. So I drove it a lot the last two years."

Staley no longer needs the car and wanted to make sure he could pay off the loan on the vehicle. He says last year he wanted to sell the car to Carmax but the offer was too low at $16,000. Now he was offered $21,000.

"We were here last year and tried to trade it in and they did not give us anywhere near what we owed or what we wanted," Staley said. "Came back this year and we were actually pleasantly surprised. They are giving us enough to pay it off -- more than what it was last year, significantly more than what it was."

Staley is not alone in finding unexpected prices for a used car. According to the National Automobile Dealers Association, used car prices are at their highest levels in 16 years. Dealers are paying on average $11,600 for a used vehicle.

Experts say drivers are holding on to cars longer, making for a short supply. While the spike in prices is good for sellers, it means buyers will pay more. So those who find great deals on used vehicles need to be especially careful before spending their money.

Mechanic Mike Poutous explained, "A lot of people will sell their car right before it needs big maintenance and they do not want to go through the expense."

Poutous says used car buyers who see a low-priced car should get the car checked out by a mechanic.

"You can tell when people have not done their maintenance because it will need everything," he said.

Poutous typically charges about $100 to give a used car a thorough review. The process generally takes an hour and half. But what if the seller won't agree to let the buyer get the car inspected first?

"Go find another car," Poutous advised.

That advice holds true for used car lots as well. If the seller won't let you get a mechanic to look at the car, do not buy the car. You'll want to talk to your mechanic beforehand so they know to expect you.

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