The price of used cars posted its biggest drop since October, according to an industry guide, an indication the tight market for late-model-year vehicles is starting to ease.
The NADA Used Car Guide said prices for cars and trucks up to 8 years old declined 2.1 percent in May.
"While prices this year have held up well, a growing supply of three-year-old vehicles is applying downward pressure on prices for late-model used vehicles," said Jonathan Banks, executive automotive analyst for the NADA Used Car Guide.
A better supply of late-model used cars results from a rebound in the new auto sales since the low in 2009. More people are buying new vehicles, trading in their used cars and more cars are coming off lease or are being sold by the car rental companies.
Some types of vehicles are in better supply and have prices that are declining faster than others.
For example, NADA estimated the late-model supply of midsize cars and compact and luxury utility vehicles has increased on average by 16 percent in May compared to a year earlier while the late-model supply for the overall market has increased by 8 percent.
Overall market prices have declined by 1.9 percent over the same five-month period, while prices for full-size pickup trucks are up nearly 1 percent. Prices of used luxury cars and utility vehicles have fallen the most this year, down 3.3 percent on average.
