Finally some good news for car buyers who still might not be able to afford a new car: Used car prices are declining.
When the Great Recession began four years ago banks started tightening their rules about lending money. They increased the requirements for people seeking new loans, especially those who wanted to borrow money to buy a new car. This meant, essentially, that only people who could afford a new car, didn’t need to borrow money to buy it, could actually borrow money to buy a new car.
Because they couldn’t get a loan for a new car those in the market for a replacement vehicle began turning to the used car market for their “new” car. this sudden increase in demand caused the prices of used cars to increase tremendously. Prices for used cars shot up and have stayed there for the past few years, but that curve seems to be heading in a different direction as used car prices finally decline.
Buyers are turning up new car lots again, armed with new automobile loans issued by banks which are finally willing to loan money to people who actually need it to buy a new car. This is good news for the Big Three automobile manufacturers because it means the U.S auto market is seeing a surge in sales. However, used car dealers are no doubt decrying the loss of all the new customers they have been seeing quite regularly for at least the past 36 months or so. It also means they need to lower their prices to attract “new” buyers.
For you, the person who may or may not need a “new” car, the news is good on both sides. It is good for you if you want a used car because prices are finally coming down. It is also good news if you are buying a new car because it means you can finally walk into your local bank with confidence they might actually be able to help you.
Think of it as a win-win situation and go out and get yourself a “new” car.