Small used cars are hot
The demand for smaller used cars is extremely high, which is not the norm. Most people go for larger used vehicles that tend to be considered safer with lower auto insurance rates. However, this is not the case in today’s market.
However, it is not too surprising for the experts. They compare this surge in used small car sales to the summer of 2008, when gas prices soared. Sounds familiar for summer 2018, right?
The consequences of this change in the market is that car companies are reducing their production of new and small cars. Low supply increases demand for the small number of new and small vehicles that are available, which means that customers must bid higher to get the vehicle.
Here’s how the market moves, as used car sales jumped 2.2 percent, a 13-year high. That also means that prices for small vehicles must rise – 3.9 percent in fact. It is simply the way to play the market.
There has also been an influx of rental cars that flooded the market, and as the other numbers show, rental cars are very easily absorbed. People seem to be looking for used cars as basic transportation. Another reason is that hurricane and flood victims from previous storms are using up their insurance money and it’s all they can afford.
There are also some other benefits to saving money when buying used cars, here are a few.
When buying new, your car can depreciate up to 50% in three years, which means losing a lot of value. When you buy used, you don’t have to worry about the cost of depreciation.
More value for your money
Without having to worry about depreciation, you leave more room in your budget for better equipment or even a better model than you would choose if you were buying a new one.
Only 350 different models are offered on the new car market per year, but there are many more options on the used market, which is good news if you can’t find your dream car on the new market. This means you don’t have to settle or pay more just to settle for a vehicle that you are not entirely satisfied with.
Your car insurance is based on the value of your car, so it is less expensive with a less expensive car. With new vehicles, they are more expensive, so the insurance is more expensive, except then, you also have to deal with depreciation for the next three years, no matter how well you maintain your vehicle.
Cheaper registration fees
Depending on your location, older vehicles usually cost less to register, which is definitely a bonus.
If you are considering buying a used car, especially a small one, now is the time to do it!