2016 Used Car Market – A Preview
How is the used car outlook for 2016? Knowing the answer can help anyone who is planning to upgrade his vehicle, get a new one, boost his dealership, or change an old car for the better
Used-car sales are expected to grow in 2016.
There will be more cars sold in 2016, which has been the trend over the last few years, according to Kelley Blue Book, one of the trusted websites for used vehicles market. It is expected that the sale will break a new record, which is definitely good since 2015 was an excellent year in the industry with almost 2% increase in sales compared to the previous year. However, 2016 should be a warning to those who are planning to sell or trade in their vehicles. By 2017, the sale will begin to taper off. According to National Automobile Dealers Association, the prices will fall by as much as 4.5% starting in 2017, which means that there will be around 28% increase of used car supplies than 2014
There is an increased demand for new vehicles.
One of the primary reasons for the possible slide of used car sales is the increase of new vehicles sales. NADA believes that for this year, the total sale will be about 17.2 million units, a far cry from less than 11 million around 2009, a period where the United States is reeling from the effects of the global recession
There will be more off-lease vehicles.
Not everyone likes to own a vehicle. Rather they lease it as it removes the burden of paying probably huge monthly car repayments and insurance. Further, when leasing is over, which is around 36 months (3 years), the lender now has the option to sell it. For buyers, it means reduced prices since the market value of the vehicle then has already gone down, but you can still take advantage of late-model versions since, generally, a vehicle’s life is about 5 years. After that, its resale value goes down significantly. In 2016, at least 3 million leases will reach its expiration date
Options may be a combination of old and late models.
With the economy recovering, there is a good chance that the demand for late-model vehicles will go up, as consumers can now afford them, and they do not have to spend huge amounts of money for the purchase. But it is also not impossible to see old cars that are more than 7 years old to be sold. As car features are improved regularly, they become more durable and reliable even past the 5-year mark
Decreased Volkswagen sales may continue next year.
Volkswagen is currently taking a beating in the industry as emission scandal continues to be talked about. Its diesel cars turned out to be equipped with a feature that can manipulate actual carbon emissions. When turned off, these Volkswagen cars would have emissions higher than what’s allowable. So far, auction prices for some models like Jetta have gone down by around 5%.