The auto industry is experiencing a period of change. Cars are more fuel-efficient, tech-savvy, and there are more options than ever before. But how do these changes affect the used car market?
The used car market has always been volatile, with prices soaring and plummeting depending on demand. However, these days the ups and downs in pricing seem to be happening more frequently. In this post we’ll look at why used car prices are dropping and what you can do if you’re thinking about buying one right now.
Why used cars became so popular
Used cars have become more popular, and for good reason. They’re much more affordable than new cars, and they’re available in large numbers due to the fact that many people are opting to hold onto their vehicles longer. Used cars also tend to be more stable because they’ve been driven and tested for years through all seasons; this means they can survive rain, snow, heat and cold better than unproven vehicles which may not have been driven as long.
You may have noticed that new car prices have been rising, and you might be wondering why. It's a combination of supply and demand. The availability of microchips has been low due to a global shortage, which has caused a rise in the price of new cars. These microchips are needed for the newer high-technology cars and since they are not readily available this has caused a shortage of new vehicles. Because this has happened, many people are turning to used cars instead--and that's affected how much they cost as well.
The result? You'll save money on your next vehicle purchase if you decide to buy used instead of new!
Here's why used car prices are dropping
The reason for the drop in used car prices is that wholesale prices are dropping. Wholesale values are determined by demand, and when demand drops, so do prices. Another factor contributing to declining used car values is an increase in new car inventory. When more cars are available on the market, it's harder for buyers to find a good deal or an excellent vehicle. Interest rates have also risen recently, which is expected to affect the pricing of vehicles. And finally, as we've mentioned previously, there's been an increase in new vehicles coming off lease by consumers who want newer models without having to pay full price for them (and "lease" just means "rent"). This means that even if consumers don't necessarily want new vehicles themselves—they just want something newer than what they currently own—they might still choose one over buying a used model instead of leasing it again because there are too few choices among reasonably priced options.
Conclusion
We hope that this has helped you to understand the current trends in the used car market. There are many factors at play, but we believe that the key takeaway is a simple one: used cars are getting cheaper. This means that buying a pre-owned vehicle can be an excellent way of saving money on your next purchase. With this being the beginning of a new year, end of holiday season, and new models coming out this is the best time to make your next purchase.
