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5 Best and Worst Cities For Buying a Used Car

Stocks in this article: KMX AN PAG SAH GPI ABG LAD



PORTLAND, Ore. (TheStreet) -- A used car hasn't always been a great deal since the recession, but buyers in some U.S. town are finding them a much easier sale than in others.

Depending on location, the price of a used car on a dealer's lot or even in a listing on Craigslist can be considerably more than what someone on the other side of the country is paying. Supply, demand and the general economy of the surrounding area mean there might be better deals just a few towns away or across the state border.

The U.S. auto industry reached 15.6 million vehicle sales last year after bottoming out at 10.4 million in 2009. While the industry is on pace for 15.9 million sales this year, it's still well below the 17.4 million it rung up back in 2001.

Sales of new cars have increased 4.3% year to date, but used cars have continued to be hot commodities as inventory recovers from the economic downturn and buyers seek deals. Publicly traded used car dealers CarMax, AutoNation, Asbury Automotive Group, Group 1 Automotive, Litihia Motors, Penske Automotive Group and Sonic Automotive have watched vehicle sales rise for 19 consecutive quarters and by double-digit percentages in three of the past four quarters alone.

According to used-car data firm Manheim Consulting, vehicle repossessions are down as the economy improves and 8% fewer people are selling their used cars. Meanwhile, leases are back and dealerships are unloading 2.5% more used cars than they were a year ago. Prices for used vehicles are up across the board, with cars that were selling for $8,000 to $10,000 less popular this year than models going for $11,000 to $14,000.

Part of the problem is that frugal U.S. drivers shocked by the recession aren't as willing to swap out their cars as they once were. Automotive data service Polk found that the average age of cars and light trucks on U.S. roads to be 11.4 years. That's up from 8.9 years a decade ago and 9.8 as recently as 2007.

“Where you shop for your car can make a big difference in the prices you’ll find, so if you are motivated to save money, it’s worth looking beyond your local area,” said Langley Steinert, founder and chief executive of used car pricing site CarGurus. “However, even for shoppers living in the more affordable used car cities, understanding local market values is critical to assessing whether a particular listing is a good deal or not.”

There's a lot more than geography separating places where used cars are a great deal from towns where they're far pricier. CarGurus, for instance, used its Instant Market Value algorithm to determine used car values in 139 different metro and rural areas across the country. It then ranked the largest metro areas in the contiguous United States according to how prices in that market compare to the nationwide average.

According to its findings, a car buyer paying 1.4% more than the national average for a car in Harrisburg, Pa., would be best served driving an hour and a half or so to Allentown and paying 2.8% less than that average or making the two-hour trip to Scranton for a 2.5% discount from what the rest of the country is paying. Don't like getting gouged from 1.8% above the national average in Indianapolis? A less than two-hour trip to Dayton, Ohio, will get you get you a slightly better deal at 0.1% less than average.

According by CarGurus' numbers, the following are the 5 best and worst places to get a car. Just to help buyers out a bit, we've also looked in their surrounding areas to see where cash-squeezed buyers can find some savings.

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