Ever since the end of the recession, new car prices have crept up steadily while used vehicle values remained comparably low. In fact, compact cars actually became less expensive between 2013 and 2017 as the crossover craze left a glut of small, economical vehicles that could be purchased for little more than a smile.
Used Car Price Increases
Unfortunately, the tide is turning. A sudden influx of end-of-lease vehicles was supposed to continue suppressing used car prices for 2018. However, things have not played out that way. Despite there being so many gently used vehicles saturating dealer lots, average used-vehicle prices reached $20,153 in the second quarter of this year — making it the first time the market has ever broken the $20K threshold. According to research firm Edmunds, the 3.3-percent increase over 2017’s second quarter was also a record.
Normally, a surplus of used cars helps keep prices down. But the popularity of utility vehicles and the proliferation of advanced tech has begun to seriously affect the secondary auto market. Five years ago, cars made up about 50 percent of United States’ new-car sales. But trucks and SUVs have since taken the majority of the industry’s volume, appearing on used lots en masse. That shift also forced up new vehicle transactions. In December, the average price of a new automobile in the U.S. reached $36,848 — an all-time high.
“Customers forget a new car is now more than $30,000 and they expect it to be $20,000,” Brian Allan, a senior director at Galpin Motors Inc. in Southern California, told The Wall Street Journal. “When people see the price has gone up, it is sticker shock, especially when people only buy a car every five to six years.”
That sticker shock forced some buyers back into the used market, pushing demand through the roof and allowing dealerships to charge more. This is further helped by dealerships having more access to off-lease crossovers and pickups, the kind of vehicles the average consumer is interested in buying.
Replace The Engine In The Vehicle You Own
As the prices continue to go up on new and used vehicles, consider replacing the engine in the car or truck you already own.
Roadmaster remanufactures engines to supply quality customer satisfaction.
Satisfaction and peace of mind is what you experience when buying from Roadmaster. You won’t find better customer service and the thoroughness we offer to make sure what you’re looking for is correct. We know that’s what you expect. Buy from Roadmaster and you won’t be disappointed.
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