Posting in Technology
Even as the auto industry gains steam, fewer used cars for sale have created a difficult market for those looking to buy second hand.
The auto industry may be on the upswing, but those looking to purchase a used car may find a tough market.
According to new data from the National Automobile Dealers Association (NADA), the price of a secondhand car will rise by nearly two percent this year - after a three percent increase in 2011. The average price of a used vehicle in 2012 is expected to be $11,850 for cars and $19,050 for light trucks.
A main reason for this is that during the recession, auto manufacturers slowed their production lines, so by 2010 there were simply fewer used cars on the market. The struggling jobs market and economic uncertainty have made people to hang onto their cars for longer. The NADA reckons that the average car on the road today is 11 years old.
While the price spikes have been particularly pronounced for fuel-efficient and compact used cars (NADA expects a 2.7 percent price jump this year), the price of gas guzzlers like SUVs may increase by a smaller margin (1.4 percent) this year.
The good news is that the U.S. auto industry has emerged from the recession even stronger than before. It is producing better vehicles, and U.S. consumers are finally looking to buy new cars and trade in their older models. The NADA expects sales of 13.9 new cars in 2012, compared to 12.8 million last year.
Photo: Flickr/Alden Jewell
Feb 6, 2012
Hmm I also agree that people donât sell their cars during recessions that are why its value increased day by day, thanks for such superb information!
Yeah it is imperative that during recession people not sell their cars and manufacturers slow down production, that eventually make used cars expensive. http://www.tyre-shopper.co.uk/branches/durham
Most of the people prefer to buy a cheaper used car rather than an expensive new car. With more people buying used cars the demand goes up. With higher demand, the price will also rise. However, last week I purchased a luxury used car with very cheap rates from automotix.net/carshotline.html , I got reliable used car with cheap rates.
First, as mentioned above, "Cash for Clunkers" removed many perfectly good cars from the marketplace. In addition to that, since it was mandated that those "clunkers" be shredded whole instead of being recycled for parts, the used parts marketplace was deprived of a large supply of perfectly good parts that otherwise would have gone to maintain the existing fleet of used cars, which then became more expensive to repair. Second, for decades the used car market had been flooded by both lease returns and low-mileage rental cars. This was back when GM & Chrysler were building cars at a loss and selling them cheap to fleet buyers because it was cheaper to do so than to lay off union workers. Those cheap fleet cars then flooded the used market in a year or less. When GM & Chrysler went belly-up and the rental business diminished with the rest of the economy, that stream stopped, drastically reducing the number of cars in the "used" marketplace.
I went to a local Dodge/Chrysler (now really Fiat) dealer to shop for a mini-van. After 4 hours of negotiation I had negotiated a bottom line "drive out the door" price of $21,950, but I didn't sign - because the atmosphere in the dealership felt so slimy. When I got home, I saw that the same dealership had the same vehicle (same vin number) advertised for $19740 - drive away price. Needless to say I won't be buying anything from this dealer - ever. Unfortunately, this seems to be a common practice in the US car sales industry - and the manufactures just don't get how much more sales and profits they would make if they got their greedy, smarmy, slimy and dishonest dealers out of the purchase process - and sell direct. I can't say how much I hate shopping for a new cars at dealerships. Only realtors come anywhere close to this level of deceptions and absence in professional ethics as car dealers.
Given the number of foreign mfgrs. in the US making cars and that their parts - and even for surviving US brands like GM and Ford have the bulk of their parts value being imported - it doesn't seem to really constitute a real US car industry - much less one as "strong" as when US automobiles were made in total in the US.
Many, many car shoppers share your frustration with many new car dealers. Most people hate shopping for a car more than going to the dentist. However - don't blame the auto manufacturers for this - most would get rid of the traditional retail new car network in a second if they could. But . . . 1> It is against the law for an auto manufacturer to sell direct to a retail customer. Goes back many years - makes no sense - should be changed. 2> State laws are very heavily in favor of maintaining the traditional new car retail store - especially Texas. The dealers and lawyers and state lawmakes are all in bed together on this one. Laws favor the dealers - and are prejudiced against the auto manufacturers. You want change - start with the dealer laws in your own state. However - manufacturers do need ways to sell their products, have them serviced, have the waranty supported, sell parts, etc., so the need for some form of local retail store is there - but the manufacturers would like to be able to have a lot more control over how dealers treat their customers. But they are legally prevented from having any control over what their dealers do. So what can you do? You already did the right thing - walked out of a bad dealer. Any new car purchaser can buy from any number of dealers - you do not have to buy from the one closest to you. So - shop around even amongst dealers handling the same brand. Every one will treat you differently - and you may even discover oner of the rare Good dealerships - they do exist! Also - use the internet to your advantage. Most cars are commodities - so once you decide on the make, model, color & options you want - send e-mails to all dealers that sell that brand within a 100 miles radius of you and ask them to quote what their best out-the-door price is. You will find that 1/2 will not even respond to you - but that some will get back to you immediately and a few of those will gladly work with you to get you the car you want for the best price. It's too bad that consumers have to play these games to get a fair price - but just consider all the games the dealers play against you? Good luck.