Consumer Confidential: Used cars getting cheaper; ditto (maybe) for food and gas
-- If you're in the market for a used car, the tide may be turning in your favor. After rising much of the year, used-car prices may have peaked -- especially for small, fuel-efficient models -- thanks to an easing of gas prices. Since the start of the year, used-car prices for compacts rose $2,200, or an average of 22%. Hybrids went up $3,000, or 20.4%, according to Kelley Blue Book. If gas prices hold steady or fall slightly, Kelley predicts used-car prices will fall up to 5% more by the end of the summer. They'll fall more if gas prices fall below $3.50 per gallon nationally. Even with the decline, Kelley is urging smart buyers to hold off making a purchase until the end of summer, when prices are likely to fall back to normal levels.
-- And used cars may not be the only thing coming down in price. Wholesale food prices dropped last month by the most in a year, suggesting that the prices we see at the supermarket may be on the way down as well. Fruit and vegetable prices led the declines. Tomatoes plummeted 47%, the most since last June. Spinach prices dropped 48% and watermelons fell 74%. Meanwhile, gas prices at the wholesale level rose by the smallest amount in eight months. Consumers had been paying an average of nearly $4 for a gallon of gas in early May. On Monday, the national average was $3.70 a gallon, according to AAA. Still, that's a dollar more than what consumers paid a year ago. Analysts think the economy will regain momentum in the second half of this year if gasoline prices fall further.
-- David Lazarus
Photo: Used-car prices may be easing. Just ask Cal Worthington's dog, Spot. Credit: Screen grab