Used Car Prices Rising Above New
Posted: Wednesday, July 14, 2010
by David Ruebush
http://www.iwantacar.com
I was driving down IH-35 yesterday when it hit me. As I drove past a local Chevrolet dealership, I noticed a Tahoe with a sticker on the windshield that read " $7,800 off " . This was just one of the many amazing price reduction stickers blanketing the windshields of new Chevys along the highway. Car after car, dealership after dealership, new car prices are falling.
Auto lenders have been constraining their lending requirements over the past 18 months because of the fitful economy, which has caused a great deal of car shoppers to enter the used car market. Common sense says when there is a rise in demand, there will normally be a rise in prices. As a matter of fact, the average 3-year-old used cars price has gone up 11.5 percent from last year. All the while, in the midst of increasing used car values, new car makers are chopping prices.
As I studied this concept further, I found some interesting information. There are now 41 new vehicles that cost less to buy new than used, when you compare a new model to a one year old vehicle, make zero down payment, and finance the purchase for 5 years, according to the Edmunds.com study. The same study also reveals 93 other new car models that are no different in cost whether you buy new or used. What does this mean to you? You should research before you buy. There are some very good deals out there for you to find.
Detroit released numbers that show U.S. car sales stalling. Sales of most manufacturers were higher this June compared to last year, but they are lower than March, April, and May. Toyota reported June sales were down 14 percent from May, GM reported a decrease of 13 percent, and Fords sales dropped 11 percent.
Both analysts and auto manufacturers have made recent statements that show they feel the lackluster new car market recovery may be shutting down. The auto industry is approaching tomorrow with apprehension and questions while buyers keep expressing fear, lenders keep tightening their belts, and the economy keeps acting sketchy. Noone seems to know what tomorrow brings. Therefore, it remains expected the industry will continue to slash prices.
Paul Taylor, chief economist of the National Automobile Dealers Association says the gap between new and used cars that has been narrowing for the past 18 months will continue for " at least another year " in an article by Gregory Karp in the Chicago Tribune. So, if your finances or fears of the economic future are making you think used, you should do your homework. New may be a better choice.
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