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Multiple Factors Cause Influx of Inventory in the Used Car Market as Fall Begins

You have one of a number you are immersed in route for someone with what you may be significant in the closet inventory as fall began. This usually confluence of will combine to drive down car prices and make the car market an excellent deal for buyers. This is a significant change and you are is proved to be a better deal over the past several years.

1. Auto Makers Built Fewer Cars in 2010 Due to Recession

The first significant factor is that unique auto makers built fewer cars in 2010. This was primarily due to caching and significant drop in demand for new cars from 2008 two 2010. During this time. The buyers also considered leasing vehicle. Now the automakers on building more new cars they have increased the number of promotion needs and incentives for people to purchase new cars. This has led to a decrease in demand throughout the used car market.

2. Cars Sold and Leased in 2011 and 2012 Are Being Traded In

Another key factor affecting the used car market is the influx of available used cars stemming from the leased vehicle market. While some formerly leased vehicles are sold directly to used car dealers many are made available on the used car market and at public auto auctions. As a result, the consumer demand for former leased vehicle is exceeded by the number of available models. This places downward pressure on their secondary market value.

3. Growing New Car Sales Increase the Number of Trade-Ins

The number of potential buyers has also played a significant effect on the used car market as fall arrives. While new car sales will have a modest effect on the used car market, in terms of demand, the number of trade-ins plays a significantly larger role. Throughout the first part of 2014 the number of new car buyers which utilize trade-ins has increased significantly. In the second quarter of 2014, nearly 50% of the new car buyers were also trading in their previous vehicle. This has created a notable boost in the availability of used cars.

4. Growing New Car Sales Lead to Decrease in Demand for Used Cars

Not only has the increase in trade-ins affected the used car market but so has increase in the demand for new cars. As more people are in position to take advantage of the incentives provided by manufacturers on new cars the demand for used cars has shown a sharp decline. This is great news for used car buyers as the decrease in demand will create a significant depression on used car prices as fall begins.

5. Secondary Market Retail Prices for Used Compact, Entry Luxury, and Large Crossover SUV Prices Decrease the Most

In the secondary market the retail prices for used compact and entry level luxury cars, as well as large crossover SUV prices will decrease the most over the coming months. This is a trend that began in mid-June and is expected to continue throughout the rest of the year. This is because a majority of the trade-in vehicles and former leased vehicles fall into these categories. As a result, these types of vehicles will see the largest price drop on the secondary market because there is a temporary increase in supply while the demand has remained steady

6. Average Interest Rate for Used Vehicle Loans Has Decreased

Another factor which has spurred the secondary car market is the availability of loans from dealerships and independent suppliers. The average interest rate for used vehicle has decreased. This is primarily due to manufacturers and authorize dealerships focusing on selling certified preowned vehicles. In order to ensure they continue moving used vehicles while offering significant incentives on new vehicles they have decided to offer lower interest rates on loans for used cars.

7. Used Car Sales Volume has Decreased – 13.7 to 5.6 percent

In terms of overall supply and demand, the volume of used car sales has decreased since the beginning of the year. During the first and second quarter the demand for used car sales was 13.7% of overall dealership sales. Since then there has been a notable decline. Many dealerships are reporting used-car sales volumes as low as 5.6%. This underscores the significant decline in demand on the secondary used-car market. At the same time the availability of this type of vehicle has increased. The result is notably lower retail prices for used cars.

8. Increased Reliance on Internet Has Depressed Prices

The Internet has long decreased retail prices of new and used cars. As consumer reliance on smartphones for research and the dealerships use of the Internet to generate sales continues to increase the overall price of individual unit’s decreases. This is because consumers can quickly compare prices among dealerships within a small geographic area. Overall this has created a notable depression of retail prices on the menu and secondary vehicle market across the United States. As dealerships continue to press forward in utilizing Internet salespersons to move vehicles the price disparity from one dealership to another will continue to decrease.

9. End of Year New Car Inventory May Show Up Earlier This Year

A final factor which leads experts to believe the price of used cars will continue to decrease throughout the rest of 2014 is end of year new car inventory deals. While the overall demand for new vehicles has significantly increased over the past six months many dealerships still reported being overstocked when it comes to new units. In order to get rid of the excess inventory before the 2015 models are released the prices of both new and used vehicles will decrease. Not only will the price of new units decrease because dealerships must move inventory that the secondary market will see a further surge in supply as most consumers continue to rely on trade-ins to decrease the purchase price.

Considering the variety of factors which have changed over the past year in regards to the secondary car market there is no doubt used cars will continue to decline in terms of retail pricing. While this trend continues as the market gains balance, the final few months of 2014 promise low prices for used-car buyers.

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