Used-Car Prices Rise Again, Should Go Even Higher
If you’re in the market for a used car, it’s more important than ever to be prepared and do your research. Prices for used vehicles keep going up, which means the longer you wait to pull the trigger, the more you’ll pay.
That doesn’t mean you should buy a car if you don’t really need it. I have a friend, for instance, who owns a 2004 Honda Pilot with just over 100,000 miles on it. He owns it outright and told me he’s starting to think about trading it in for a newer model. To that I answered, “Why on Earth would you do that?”
The Pilot hasn’t given him an ounce of trouble and fits his young family perfectly, and his wife feels safe driving it in the snow. The only reason he could think of to upgrade is because he wants something newer. For some people, I guess, that’s plenty of reason to justify a new car payment. Heck, the car dealers bank on people like my friend, and if that’s how he wishes to spend his money, well, I can think of worse ways.
More than likely most people, like my friend, have a current car with plenty of trouble-free miles ahead of it. After all, people are hanging on to their cars longer than ever! You might as well be one of them, if you have the opportunity to do so. If you do need to buy, consider your choices carefully and compare a model you’re interested in across a few model years. Sometimes a 2009 car is identical to a 2010 but costs thousands less.
According to Kelley Blue Book, used-car prices are likely to rise by 3 to 5 percent in the first quarter of 2012, and even more in the second quarter. DealFinder, as always, provides a great road map to to find fairly priced cars, even as prices continue to rise.
Should prices increase by 5 percent in the coming weeks and months, the cost of a $12,000 used car would increase to $12,600. That may not seem like much, especially when stretched out over a typical 60-month loan term, but I think $600 is a pretty substantial amount of money, especially when applied to a car that you may not really need.
As more people wait to buy cars, though, fewer cars are entering the used market, which further drives prices up. It’s a vicious cycle that will end only when people lease regularly, trade cars more frequently and/or buy new cars more often. None of those seem too probable at the moment, which means if you need (or want) to buy a used car, DealFinder should be your new best friend.
When will you buy your next used car?