Used car prices are always firmly tied up with the sales of new cars – and as they were strong in the end of 2014, we can expect this tendency to remain strong in 2015. When a person buys a new car, he tends to trade in his old one, which leads to the increase in inventory of used cars, which in turn results in increased supply and decreased used car prices.
Mid-January, the Inquisitr reported that despite a general increase in car prices when compared with the same period of the last year, used cars are going to get steadily cheaper in the months to come.
“The recent sales in new cars, which gave customers a chance to trade in their used cars, driven by incentives and offers from dealers and manufacturers, has increased the inventory of used cars.”
And it is not the only thing that influences the used cars market – while leasing was rare during the recession, in the last couple of years it became a common thing again, and right now we are experiencing an upsurge in relatively new cars with low mileage coming off the lease; all of them are going to the used car market.
Which means that the tendency of the market to grow and prices to go down is going to last even longer. BusinessWire reports that according to Fitch Ratings, Inc., the prices on used car will decrease throughout 2015 and 2016.
“Higher volumes of trade-ins and off-lease used vehicle returns have led to a rising inventory while increased new car production and sales are diverting some used car demand. Fitch expects the shift in the supply and demand balance to lead to deterioration in prices throughout 2015 and 2016. This rising supply could lead to other stresses like increased incentives that may further put a strain on used vehicle values.”
It means that if you are thinking about buying a used car, it is probably a good idea to wait out a little bit until the market gets oversaturated by traded-in models to give sellers an opportunity to adapt their prices to changed environment. So, unless your current cars literally falls apart, it is wiser to take better care of it for a while to get a better deal later on, as used car prices go down to accommodate for the increased competition.