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Used Car Prices Dropping

Brand new cars with turbos and superchargers cost a lot of money, this makes sense. What’s confusing is how used car prices sky rocketed in the last few years. It was getting to the point where someone could actually sell a car for more than they paid for it a year down the road.

A few factors led to the price increase of used cars. No one wanted to take out new debt, or they couldn’t qualify for credit to buy a new car. So, owners held onto their own used cars. Car manufacturers also limited the amount of production during the recession. Since no one bought cars and car companies didn’t make any cars, a shortage of used cars existed. Since I was able to stay awake in most of my Econ classes at school, I know that when supply goes down price goes up.

Now that there is some light at the end of the tunnel of the recession and gas prices have leveled off, people are buying new cars again. Used car demand is going down a bit, thus so are the prices. The National Auto Dealers Association of America predicts that prices on used cars will continue to fall. Midsized and compact cars could see a decrease up to 5% in June.

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