USED CAR PRICES SOAR AS SPRING ARRIVES
After a long drawn out stagnant winter, the long awaited spring season bump is on the way.
Traditionally selling a vehicle during the late fall and winter can often be difficult. The cold weather and snow often effects the psyche of northern region residents of the United States. Because of stagnant used car sales, there’s a tremendous amount of used car inventory that does not move off used car lots. Dealers only buy if the price is right which effects the market on the vehicle you currently own and want to sell. Also know trade in prices offered in pricing guides are most likely erroneous as most guides reflect sales data from 2 months prior. In an essence, you’re not going to get the suggested KBB (Kelley Blue Book) price you saw over the internet. As a motor vehicle owner, you want to get top dollar for your used vehicle however there are many variables that effect what you will actually get. Here’s a breakdown of how the market works and why spring may be the time to sell your car.
1 – LEASING EFFECT – For starters, leasing a new car seems to be a current trend. With leasing companies opening up all over the United States, along with new car stores, it’s cheaper to lease a vehicle over a 3 year period than to buy new. You drive the car not having to worry about depreciation from potential accidents or mechanical issues and the vehicle is covered under manufacture warranty. When the lease is up, you surrender the vehicle and lease a new one keeping on point with current times while driving worry free. When people start leasing more, used car sales slip. Lower demand equals lower prices. Just because the MSRP on your vehicle says one thing, demand ultimately sets the price.
2- VEHICLE HISTORY -The accident factor is the largest single handed depreciation hit your car can take. With vehicle history reporting companies such as Carfax and Autocheck, new car buyers often look into a vehicles history prior to purchase. If the report on the vehicle says there was a prior accident, it deters that buyer from paying top dollar. Think about it, 2 cars are sitting side by side both having the same mileage and options. One has accident history and the other does not. Are you going to pay the same for the one with the accident? Probably not. Dealers will typically give a better deal to buy the hit car versus one without. The lower price is the incentive. With that being said, now you understand why dealers and private buyers pay less for hit cars.
3 – VEHICLE AGE – Lets be Frank… If you’re car is over 10 years old and over 100K miles, the market dwindles greatly. In fact, you may have to sell the car privately if you are looking for anything more than junk money. Older, non desirable domestic cars may only be worth scrap money while certain Japanese vehicles such as Toyota and Honda still hold value. Again, the older the car the less of a market there is.
4 – SPRING BUMP – Spring is the best season to sell your car or truck. In fact its the most active season for used cars. As income tax refunds come in, consumers have extra money seeking to upgrade into a newer vehicle. Dealerships tend to stock up buying used cars during this time. Historically consumers will flood used car lots seeking a new ride. Higher demand equals higher prices. Ralph Milone or RCO Cash for Cars reports wholesale values rise as much as 15% based on wholesale transactions at both Manheim and Adesa Dealer Auctions.
Not matter what your situation is, a good way to get an idea of what your car is actually worth is by calling a variety of cash for cars companies prior to trading or selling your vehicle privately. This gives you a foundation of a bottom line number to start with. Lastly, when looking to trade a vehicle at a new car store, never tell them you have a vehicle trade. Negotiate the best possible deal on your new car or truck first. When its all done, introduce your vehicle for trade. Dealers historically quote a higher prices for your trade but the consumer ends up paying more for their new car purchase giving the false illusion that the trade was worth more than it actually is.