(March 13, 2013) MCLEAN, Va. — Wholesale prices for used cars and light trucks up to 8-years-old rose a modest 0.8% in February, well below the 3% increase for the month over the past two years, says the NADA Used Car Guide in its March edition of Guidelines .

"Price growth for used vehicles through early spring will be weaker than what is typically seen for the period," said Jonathan Banks, executive automotive analyst with the NADA Used Car Guide.

"Consumers and businesses are beginning to react to the expiration of the 2% payroll tax holiday as well as political activity surrounding the federal budget sequester and debt ceiling extension. These factors will have a negative impact on household income and reduce spending."

Overall, used-vehicle prices have increased by 0.4% over the first two months of the year, significantly less than the 4.4% and 2.4% increases recorded over the same two-month period in 2011 and 2012, respectively.  

"The pull-ahead demand for used vehicles stimulated by Hurricane Sandy at the end of 2012 and the delay in filing income tax returns as a result of last year's fiscal cliff resolution is also playing a role in slowing down price growth," Banks added.

In addition, February's tepid performance dropped NADA's seasonally-adjusted used-vehicle prices index to 122.7, which is a decline of 1.4% from January's level and just 0.9% higher than February 2012's reading of 121.6. The index is a seasonally adjusted measurement of the change in price for used vehicles up to 8 years in age.

Looking ahead, NADA expects that used-vehicle prices in March will be flat to up moderately compared to February, and decline in April.