SANDY: DRIVES USED CAR PRICES HIGHER

Edmunds.com the car-buying guide predicts hkes of as much as $700. to $1,000 on some makes and models of used cars, trucks, and suv's. Considering that most new and used car dealers make the bulk of their profits from January-May when tax refund checks arrive in the mail now is the time of year they are searching for inventory. Flooding, and other damages from the massive weather system destroyed approximately 100,000 vehicles according to the National Automobile Dealers Association. Fewer, cars on the road means fewer cars to be traded in for a newer model. Sandy's supply squeeze comes at a time when most used car prices have been rising by at least 20% over the past (3) years according to the NADA. Consumers have been holding on to their vehicles partly because of tough economic conditions and partly because of stiff credit requirements that often times will not allow their loans to be approved due to length of time on the job past credit problems. It used to be the average family traded cars every 3. to 5 years. Currently, families often wait 4 to 7 years and the trade'in has very little or no value. The forces the dealership to allow very little trade'in allowance forceing the consumer to borrow more money and have a higher monthly payment. It seems like the perfect storm for used car dealers based on supply and demand but even dealers are having a tough time finding excellent low mileage vehicles for resale. Stephen C. Webb owner of Stevescars.com owns a small used car lot in Paducah, Kentucky. He has resorted to combing police impound auctions seeking vehicles that have been impounded by law enforement agencies and reselling them on his lot of 15 years. He recommends when purchaseing a used vehicle spend the 45.00 and order a vehicle history report to check for flood damaged vehicles. Finally, some used car analysts recommend this could be the time to buy new. The difference in the monthly payment not to mention a new car warranty often times make the savvy consumer to purchase a more up-to-date vehicle with all of the new gadgets and toys installed.

WHOLESALE PRICES RISING ON USED CARS

Average wholesale used vehicle prices reversed the general softening they have shown since spring and rose significantly In October. When looked at on a weekly basis during the month of October, prices were actually declining during the first half of the month, but more than made up for lost ground during the second half of the month, according to ADESA Analytical Services. According to ADESA Analytical Services' monthly analysis of wholesale used vehicle prices by vehicle model class, wholesale used vehicle prices in October averaged $9,742 - up 2 percent compared to September and down 1.4 percent compared to October 2011. Prices for trucks were up more than those for crossovers and cars, as they have already taken a hit from higher gas prices over the past few years. The Openlane U.S. market index, which is based on data from the ADESA Openlane online marketplace, also rose by 2 percent month-over-month. Prices for used vehicles remarketed by manufacturers fell by 0.2 percent month-over-month in October, but were up 2.2 percent year-over-year. Fleet-lease consignors experienced a 2.6 percent decrease in October, leaving prices down 0.7 percent year-over-year. Dealer consignors saw a 0.5 percent average price increase versus September, resulting in prices being down 0.9 percent versus October 2011.

FEW BUYING INCENTIVES FOR CAR PURCHASE

Automotive incentives shrank again in October, even as dealerships continue to ring up healthy sales numbers. According to Edmunds.com's True Cost of Incentives report, the auto industry spent $2,124 per vehicle in October, down 3.3 percent from September and down 1.4 percent from October 2011. Edmunds.com reported in September that incentives fell for the first time in five months, even as the auto industry produced its best monthly SAAR of the year. Just last week, Edmunds.com projected that October will deliver the second-highest monthly SAAR of the year at 14.8 million light vehicles, a figure that ultimately may be affected slightly by the damage caused by Hurricane Sandy along the Mid-Atlantic seaboard. Ford was the only manufacturer out of the top six auto companies to increase its month-to-month incentive spending in October. The Detroit automaker's incentive spending climbed 2.7 percent from September to $2,788 per vehicle. Honda's incentive spending fell the most of any major automaker, sliding 15.6 percent from September.