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Small used cars are in high demand which is not normal. Most people go for older older vehicles which are known to be safer with lower auto insurance rates. However, this is not the case for the current market.
Although for experts this is not very surprising. They compare this increase in sales of small, used cars to the summer of 2008, when gas prices skyrocketed. Sounds familiar for summer 2018 doesn’t it?
The result of this change in the market is that car companies are reducing the production of their new, smaller cars. Reduced supply increases the demand for the smaller amount of new, smaller vehicles available, meaning that customers will have to bid higher to obtain the vehicle.
This is how the market moves as pre-owned car sales rose 2.2 percent, a 13-year high. It also means that the prices of small vehicles should go up, in fact by 3.9 per cent. It’s just the way the market plays.
There is also a flood of off-lease cars in the market which is proved by other numbers, off-lease cars are being absorbed very easily. It seems that people are looking towards old cars for basic transportation. Another reason is that flood victims from hurricanes and past storms are using their insurance money and it’s all they can afford.
There are also some other money saving benefits of buying a used car, here are a few.
depreciation
When buying a new car, your car can depreciate by up to 50% within three years, which means losing a lot of value. When you buy secondhand goods, you do not need to worry about the cost of depreciation.
more value for your money
Without worrying about depreciation, this leaves more room in your budget for a better appliance or an even better model than if you were buying new.
Diversity
Only 350 different models are introduced to the new car market per year, but the used market has a lot more options which is good news if you can’t find your dream car in the new market. This means that you neither have to compromise nor pay more just to settle for a vehicle that you are not entirely happy with.
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Your auto insurance is based on the value of your car, which is why it is less expensive with a less expensive car. With newer vehicles, they are more expensive, thus insurance is more expensive, plus, you have to deal with depreciation over the next three years no matter how well you keep your vehicle.
cheap registration fee
Depending on your location older vehicles usually cost less to register which is definitely a bonus.
If you’ve been considering buying a used car, especially a small car, now is the time to do it!
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