There’s a perfect storm of conditions coming together to ensure that car buyers can walk away with the deal of a lifetime on a late-model used car.
It began in 2014, when automakers wanted to jump-start their sales by offering crazy low lease terms to lure folks into dealerships. It worked and new car sales and leases have increased steadily until this year.
The momentum of new car sales is starting to slow, partly because the cars leased in 2014 and 2015 are now coming off lease. In fact, an estimated 12 million low-mileage vehicles will come off lease by the end of 2019.
That’s what folks in the industry call a “glut,” and automakers and new car dealers don’t like gluts because it’s harder to sell new cars. Independent dealers and car buyers, though, stand to benefit from the overly saturated car market.
Combined with gas prices that continue to fall, people in the market for a new-to-them car should have plenty of inexpensive driving in their futures.
Automotive News shared this story last Friday,
Three years ago if a customer walked onto Dan Reel’s used car lot seeking a late-model off-lease Ford Escape, his answer was short: tough luck.
The supply of lightly-used cars and trucks was tight because automakers had drastically cut back on bargain leases during and after the Great Recession.
Recently, though, a computer search for available used vehicles within 150 miles of Reel revealed an eye-popping figure: 668 Escapes.
We can credit the exponential rise in leases three years ago for the huge inventory today.
Low gas prices are also fueling used car sales and helping to convince folks to plunk down their cash on trucks and SUVs. How long will low prices last? There’s a good article at oilprice.com that says some states are primed for a gas tax increase, but prices will likely remain overall much lower than the record 2008-2009 levels.
Will lower used car prices convince you to go shopping anytime soon?