The demand for smaller used cars is extremely high which is not the norm. Most people go for the larger used vehicles that tend to be considered safer with lower auto insurance rates. However, this is not the case for the current market.
It is not too surprising to experts, though. They compare this increase in small, used car sales to the summer of 2008 when gas prices skyrocketed. Sounds familiar to summer 2018 right?
The consequences of this change in the market is that car companies are reducing their new, small car output. The low supply increases the demand for the little amount the of new, small vehicles that are available which means customers must bid higher to obtain the vehicle.
That is just how the market moves since used car sales are up by 2.2 percent, a 13 year high. That also means that the prices of small vehicles must increase, 3.9 percent in fact. It is simply the way to play the market.
There has also been an influx of off-lease cars flooding the market which as the other numbers prove, the off-lease cars are getting absorbed very easily. People seem to be looking to used cars for basic transportation. Another reason is that hurricane and flood victims from the previous storms are using their insurance money and it is all they can afford.
There are also some other money saving benefits of buying used cars, here are a few.
When buying new, your car can depreciate up to 50% within three years which means losing a lot of value. When you buy used, you do not have to worry about the cost of depreciation.
More Value of Your Money
Without having to worry about depreciation, it leaves more room in your budget for better equipment or even a better model than you would go for if you were buying new.
Only 350 different models are offered on the new car market per year, but there are so many more options on the used market which is good news if you cannot find your dream car on the new market. This means you do not have to settle nor pay more just to settle for a vehicle you are not entirely pleased with.
Your auto insurance is based off of the value of your car which is why it is less expensive with a less expensive car. With new vehicles, they are more expensive, thus insurance is more expensive, except then, you must deal with depreciation over the next three years, too no matter how well you keep your vehicle.
Cheaper Registration Fees
Depending on your location older vehicles typically cost less to register which is definitely a bonus.
If you are considering purchasing a used car, especially a small one, now is the time to do it!