It's the best time in years to sell your car. According to the Associated Press, people are holding on to cars and trucks for about a year longer than they did before the recession, which has created a tight supply of used vehicles.
So few are on the market that prices have risen to their highest in at least 16 years. Dealers are paying an average of $11,660 for a used car or truck, up almost 30 percent since December 2008.
"You're not going to find a situation like this very often," said Jonathan Banks, executive auto analyst for the National Automobile Dealers Association used car pricing guide.
Frank Rozier, owner of Rozier Ford in Statesboro and immediate past chairman of the Georgia Automobile Dealers Association, agrees with Banks and feels it is an adjustment in the marketplace that was inevitable.
"With manufacturers cutting back on production in the face of the recession, in conjunction with a decline in new automobile sales over the last two years, there really is a shortage of used cars," Rozier said. "What I am referring to are cars that are one to three years old. The demand is still there, but the supply is not."
The rise in used car prices appears to be a byproduct of the recession. The average car on the road now is 10.6 years old, according to the Polk research firm. That's up from 9.8 years in the middle of 2007, a few months before the recession struck and people began to rethink major purchases.
Joe Davis, owner of Georgia Chrysler Jeep Dodge in Statesboro, said in one way it is good for the consumer, and in another way it is not.
"If you want to sell your car, you can certainly get more for it than you would a year or two ago," he said. "But, if you want to buy a used car, you are going to pay more. It affects us here at the dealership as well."
Davis said he has had to become more creative in finding used automobiles to sell at his dealership.
"I used to go down to the auction and pick up what we needed, but now I have to also go to other auctions further away to get what I need," he said. "I am calling all around. It certainly isn't as easy as it has been in the past."
The run-up in prices for used cars has been so dramatic that it almost doesn't make sense to buy them anymore said David Whiston, an auto analyst for Morningstar. That's probably a good indication that prices are at or near a peak.
"For just a little bit more, I can buy a brand new car," he said. "There's a tipping point. I think we are getting very close to seeing that."
Rozier said a customer that would normally purchase a used vehicle, should really explore the new car market.
"With the interest rates and rebates that are being offered, what you are going to pay for used versus is new is very comparable," he said.
Manheim, a big auction house where dealers buy used cars, said prices this year are the highest since the company began collecting data in 1995. Tom Webb, chief economist there, predicts that used-car prices will rise for around two more months and then level off.
Some predict that prices for used automobiles may fall in 2012 and beyond as more used cars come on the market. There are already signs that used-car prices will come down.
Leasing was 21 percent of U.S. sales in February, which was up from 11 percent in 2009, according to Experian Automotive. That should bring more used cars onto the market as three-year leases end. Banks and auto company finance arms have also loosened up credit for people with poorer credit ratings, meaning more buyers can get a loan for a new car.
"If you are going to buy a car and hold onto it for a long time, I would buy new," he said. "If you are one of those buyers that is trading a car in every two years or so, I might go another route. It just depends on what your needs are."