The demand for smaller used cars is extremely high, which is not the norm. Most people go for the larger used vehicles which tend to be considered safer with lower auto insurance rates. However, this is not the case for the current market.
However, it is not too surprising for experts. They compare this increase in small used car sales to the summer of 2008 when gas prices skyrocketed. Sounds familiar for summer 2018, right?
The consequences of this change in the market are that car companies are reducing their production of new and small cars. Low supply increases demand because of the small number of small, new vehicles that are available, which means customers have to bid more to get the vehicle.
That’s how the market moves, as used car sales rose 2.2 percent, a 13-year high. That also means that the prices of small vehicles must increase, in fact, by 3.9 percent. It’s just the way the market plays.
There has also been an influx of off-lease cars flooding the market which, as the other numbers show, off-lease cars are very easily absorbed. People seem to be looking for used cars for basic transportation. Another reason is that hurricane and flood victims from previous storms are using their insurance money and it’s all they can afford.
There are also other money saving benefits of buying used cars, here are a few.
Depreciation
When buying a new one, your car can depreciate up to 50% in three years, which means losing a lot of value. When you buy used, you don’t have to worry about the cost of depreciation.
More value for your money
Without having to worry about depreciation, you leave more room in your budget for a better computer or even a better model than you would if you were buying new.
variety
Only 350 different models are offered on the new car market each year, but there are many more options on the used market, which is good news if you can’t find your dream car on the new market. This means you don’t have to settle or pay more just to settle for a vehicle you’re not entirely happy with.
lower insurance
Your car insurance is based on the value of your car, so it’s less expensive with a less expensive car. With new vehicles, they are more expensive, so insurance is more expensive, except then you also have to deal with depreciation over the next three years, no matter how well you maintain your vehicle.
Cheaper registration fees
Depending on your location, older vehicles generally cost less to register, which is definitely a plus.
If you’re considering buying a used car, especially a small one, now is the time to do it!
