If you’re looking at getting a used car in the near future, either get something quickly or be prepared to wait until mid- to late summer. Otherwise, you’re looking at a market with no deals to be had, according to the National Auto Dealers Association.
Right now, NADA’s experts say the market is primed for used cars, six years old or newer, to fetch top dollar as a result of high gas prices, a shortage of good used cars on dealership lots, and a large demand for fuel-efficient vehicles. In fact, NADA says compact and midsize vehicles with better fuel economy will likely see the biggest spikes in their prices.
“The ongoing decline in the used-vehicle supply that began in 2009 has made it challenging for new-car dealers to consistently stock reliable, well-maintained used vehicles,” the NADA’s Jonathan Banks said in a statement. “This means that dealers will be aggressive with trade-in offers for used vehicles that are in high consumer demand.”
What Banks is referring to is the U.S. government’s Cash for Clunkers program from the summer of 2009, which salvaged more than 600,000 used cars, putting a crimp on the used-car market. While it provided a short-term sales increase of new cars, it ended up driving up prices for used cars. It also cost taxpayers approximately $2 billion, granted by way of a $3,500 to $4,500 voucher per trade-in. NADA estimates the Cash for Clunkers program has forced a 14-percent decline the size of the used-car market since 2009.
Consequently, used car prices are predicted to edge near the all-time record set last year over the next two months. Prices will cool off by approximately 1.5 percent by January versus April’s transaction costs.
What does this all mean to you? Unless you still live in a recessed area with people willing to make a deal, chances are you’re going to have a tough time scoring a bargain on your next used car. Summer months always prove the most bustling, so if you can wait for a new car, we’d highly recommend putting off your purchase until fewer people are in the market for replacement vehicles.
Source: Automotive News (Subscription required)