Not long ago the auto world panicked over the exceptionally high price of used cars. A perfect storm of unfortunate events contributed to a shortage of pre-owned vehicles.
Back in 2007–2008, the U.S. economy took a nosedive. Soon after, American automakers filed for bankruptcy. Then, in early 2011, an earthquake and devastating tsunami in Japan halted production there. Potential car buyers everywhere put purchases on hold. Car leases were all but eliminated, which of course caused a serious shortage of lease returns, typically a major source of quality used cars.
With new car sales at a halt and people holding on to their existing cars for much longer, the prices of late-model used cars were through the roof. In fact, sometimes it was more expensive to buy used than to buy new.
Finally, some 5 years later, things are getting back to normal.
Used car prices have begun to fall, partly due to the recovering economy and mostly due to the fact that automakers are close to capacity production and offering leases again.
The average lease term is 36 months, which means a steady stream of 3-year-old cars will get returned to dealers for resale.
With new car sales moving at a blistering pace, there’s officially what we might call a glut of used cars on the market. With so much supply, prices are beginning to drop.
That’s great news for buyers, but sellers might want to rethink and hang on to their cars if prices are lower than expected.
To get an idea how used cars in your area are priced, check out the CarGurus used listings. There you’ll find cars just like yours and discover what constitutes a fair price, which can help you decide whether to sell or keep your car. Want to find out our Instant Market Value of your current car? Our Used Car Price Calculator will give you a fair market price for your vehicle in your area.
For buyers, it’s a great to time to shop and use the leverage of ample supply to score the best deal possible.
Is your used car worth as much as you think it is?