In reversal, used sedan prices starting to climb

Americans who can’t afford latest SUV driving trend

CARLETON, Mich. — Late in the spring, Bob Castaldi started checking used car prices online, wondering if it would be a good time to sell his family’s loaded-out 2014 Honda Civic.

Each month, the retiree from suburban Phoenix, Arizona, kept seeing the suggested retail price go up. Last week, Castaldi listed the car, with just over 30,000 miles on it, for $16,785.

What Castaldi found is evidence of a broader change in the car business: For the first time in three years, the price of used sedans has consistently risen, driven by demand from buyers who can’t afford to join the seemingly never-ending U.S. SUV boom.

“I was surprised to see that it had gone up,” said Castaldi.

Since gas prices started falling in mid-2015, new and used compact and midsize sedan prices largely dropped as Americans shunned the traditional family car for higher-sitting and more versatile hatchback SUVs. But this year, things changed.

“We had 11 straight weeks of price appreciation this spring and summer when we’d normally see depreciation in used vehicle prices,” said Jonathan Smoke, chief economist for Kelley Blue Book.

Over roughly the past three months, used vehicle prices rose on average by 2.3 percent when they normally would have fallen by 2.8 percent, for a swing in value of over 5 percent, he said. All segments appreciated, but compact and midsize cars were the most pronounced, according to Smoke.

The average price of a new vehicle in the U.S. has climbed steadily since the Great Recession to $35,990 today, up 3 percent over a year ago, according to Kelley Blue Book. That’s out of reach of many buyers, analysts and dealers say.

But the average four-year-old midsize car costs $13,100, up 8 percent this year, according to Black Book, which tracks used sales and values. Compact car prices are also up 8 percent.

The Associated Press Auto dealers examine used vehicles at the Manheim Detroit auction in Carleton, Mich.