If you’re in the market for a used car -- especially a small car or hybrid that gets good gas-mileage -- you might know that used car prices have been dropping since early this summer.
But according to Kelley Blue Book, if you want a really good deal on a used high-mpg car, you’re best to wait a few more months.
Speaking to bnet.com, Alec Gutierrez, manager of vehicle valuation for Kelley Blue Book, said that the price of used hybrids and small, economical cars will fall by a further 6 to 8% by the end of the year.
That could equate to a drop of a few thousand dollars in the price of a nearly-new used car, but what exactly is pushing this change?
Post-earthquakes, Japan is back online
Earlier this spring, the world watched in horror as one of the largest earthquakes the world has ever seen hit Japan. Accompanied by devastating tsunamis and the subsequent partial Nuclear meltdown at Fukushima nuclear plant, the earthquakes brought the Japanese auto industry to its knees.
And it wasn’t just Japan either. Automakers around the world started to suffer the knock-on effects of the earthquake, as the supply of everything from Japanese-made electronics components to automotive paint dried up. This in turn had a direct impact on the number of new cars being made globally.
As a consequence, used car sales remained unusually high over the spring and summer months. meaning those selling used cars were commanding high prices while those on the lookout for a used car were forced to dig deep to find extra funds.
With global new-car production almost back to normal, the number of new used cars on the market has increased again, helping used car sales to drop.
Lower gas-prices mean lower car prices
Used car guy
Lowering gas prices, brought on by a whole plethora of social and economic factors, has also helped lower the price of used cars.
A lower price per gallon at the pump equates to less money to fill up. According to Kelley Blue Book, that means that more people are looking to buy larger used cars than they were a few months back, meaning smaller fuel-efficient and hybrid cars aren’t in quite so much demand.
If demand lowers, then so does the price.
No-one wants to shop in the winter
Finally, most consumers aren’t focused on buying cars in the winter. With most families concentrating on the holiday season, household budgets are often stretched to the limit at this time of year. Buying a car isn’t just impractical: it’s impossible.
The weather can often put buyers off too, especially if it means trailing around car dealerships in the middle of a harsh winter.
The savings are there
But, if you’re looking now and you can afford to wait a while, the savings alone to help you have a better holiday.
For example, a 2008 Toyota Prius is expected to fetch around $4,000 less now than it did on June 1 this year. By the middle of winter, it could be even more.
Given prices are expected to drop by another 6 to 8%, we think waiting a few more weeks to buy that used car would really help you get a bargain.
After all, who doesn't want to have extra money for the Holiday season?