Those in the market for a used car may have to pay more than expected. While late model used vehicle prices are still lower than new car prices, they are surprisingly high.
It boils down to simple economics, supply and demand. Used cars have been in short supply for a while now and nothing in 2012 appears to change that. At the same time demand for quality late model used cars has never been stronger. The result is higher prices across the board.
There is some debate on how strong used car prices will be in 2012. Some analysts see higher increases while others are not as convinced. However all believe prices will be healthy going forward.
One of the biggest reasons why supply is tight is that new car sales in the last few years have been down by up to 35% over the previous years prior to 2008. That means today’s used cars are not in the same abundance as they once were.
Many dealers rely on cars coming off leases to stock their used car lots. But in 2009, the recession caused leasing to fall to all-time low levels and did not recover until last year. Dealers aren’t expecting decent supplies of off-lease cars until 2014 at the earliest.
Also, with the average age of used cars on the road today being 11 years, there are a lot of car buyers out there looking to trade in their old ride on something newer.
Buying used cars still offer advantages over buying new even with today’s strong pre-owned prices.