Used Cars are Overpriced!
Posted on June 30, 2010
Filed Under Used Cars
Aren’t used vehicles supposed to be a bargain? I thought that Kansas City Used cars as well as other used car dealerships were known for keeping the prices low on their Altima Inventory. With the rebates and incentives being offered at Peoria Volkswagen on brand new vehicles, the used car market needs to rethink its pricing strategy if it wants to remain competitive.
According to Automotive News, used car prices have increased 6% from last year’s sale prices. The price on a used-truck has increased 11%, full-size van prices have gone up 33%, used SUV prices are up 11%, and even the luxury vehicle used-car price range has increased by 18%. Those are some hefty percent increases in prices and consumers already have tight budget constraints. So as consumers we have to wonder if these price hikes are likely to stick around or if we are in the used-car shopping market should we wait for prices to go down?
Economists are estimating that prices are likely to stay high for the time being. Keep in mind that used cars come to dealerships from expired leases, repossession, rental car companies upgrading their models, and from trade-ins when a new car is purchased. One likely reason for the high price on used cars is that new car sales are high. Most people who buy a new car are trading-in their old one for partial payment towards the new vehicle. When you combine that with the fact that the number of repossessions have decreased over the past few years as the economy is stabilizing and rental car companies aren’t upgrading their stock every year, there simply are less used cars available. The economy is stabilizing, but people still want to save money when they can. That means that the demand for used cars is high, but the supply is low; remember supply and demand from high school economy class?
So if you are looking for a different vehicle, consider the incentives still available on the new vehicles. Over time, the price of used-cars will drop back down to where it belongs. The good news is that when you go to buy that new car, your trade-in might be worth more than you think!
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