For years, it has been common wisdom to look to certified pre-owned used cars as a good value for their peace of mind. It was worth it to pay extra for extra warranty protection and to know a used car was in sound mechanical condition.

However, the tide is turning against that sentiment. Certified used cars are becoming more and more popular. That’s resulting in higher prices for certified pre-owned used cars and the distinct possibility in some instances that it might be more logical to buy a new car instead of a used one.

Certified pre-owned (CPO) sales are at an all-time high, say analysts at Edmunds.com, a car shopping website. In the company's latest Used Vehicle Market Report, Edmunds.com analysts noted that in 2014 CPO sales hit an all-time high of 2.3 million -- even though it was not a record year for used car sales overall.

Last year, CPO made up 20.8 percent of total used car sales at franchised dealerships, the highest percentage since certified pre-owned programs were introduced. One in five used car sales being certified pre-owned demonstrates how strong demand is.

"We fully expect CPO popularity to continue throughout 2015 because many leased cars are being returned to the dealership in excellent shape and lightly used cars are being traded in at faster rates than in previous years. This allows dealers to maintain a large CPO inventory," explained Edmunds.com Senior Analyst Jessica Caldwell. "Car shoppers are finding a great selection to choose from, and many are comfortable spending a bit more for that extra peace of mind."

Even though there are more used cars in the marketplace than in recent years, retail prices have remained high. In fact, with a six percent gain in year-over-year used prices, 2014 generated record high average used vehicle retail values. The average price for a used vehicle sold at a dealership last year was $16,800, compared to $15,900 in 2013. In 2014, the average one-year old vehicle sold for almost $30,000, 5.7 percent higher than in 2013.

"Lightly used cars are very appealing to car shoppers since they are equipped with modern technology and have already taken their biggest depreciation hit," said Caldwell, who pointed out that 19 percent of used vehicles sold in 2014 were one or two years old, up from 14 percent in 2013.

One interesting side effect of all this is the fact that the average age of used cars may actually be dropping. The age, according to Experian Automotive, http://www.experian.com/automotive/auto-data.html has dropped below 11 years.

Another factor that boosted average retail used car prices in 2014 was the dramatic decline in gas prices: this drew a greater proportion of shoppers to larger vehicles, which typically cost more. In addition, low interest rates and longer loan repayment terms allow shoppers to buy more expensive vehicles with lower monthly payments, and all of these trends were realized in 2014.

Despite higher average prices, the average monthly payment for used cars financed in 2014 was $370, three dollars less than the all-time high that was reached in 2007. On the surface that might seem like good news but what it fails to take into account is the length of used car loans has increased in the last eight years. It’s a problem when buyers start to stretch their financing out over longer periods. It often leads to instances where loans outlive the used cars they are paying for. Read this report on the state of used car loans. http://usedcars.D106/od/financing/a/New-Report-Pains-Unflattering-Picture-Of-Used-Car-Loans.htm

The Edmunds.com report also tracked the average age of car shoppers and found that Millennials are a growing customer base for used cars. "As new jobs and other changes in their lifestyles lead them to buy cars, Millennials are using their smartphones to find the best deals and are often choosing used over new," observed Caldwell.

The full Used Vehicle Market Report and other insight into recent auto industry trends can be found in Edmunds.com's Industry Center.