It’s no longer a status factor to have newer and shinier, but to make do with what one has. Parts and service departments across the country are reporting good numbers as people chose to fix their current vehicles rather than trade out and into something new.
Taking this into consideration, there’s no better time to buy a new vehicle. February 2009 had the lowest prices and highest incentives in years. Both Chrysler and Hyundai offered the highest incentive levels ever, and the incentives offered were the highest in February ever for Ford, GM, Toyota and Honda.
Historically, it may be one of the best times to buy new, but more and more people are turning to used cars. In fact, according to a recent study by Edmunds.com showed that over half a million used cars sold in the past three months would have been new vehicle sales if the public wasn’t so worried about the economy..
Several factors are motivating this change, but the biggest one is the recession. Just a year or so ago, not only was everyone ‘keeping up with the Joneses’, they were trying to outdo their neighbors. A new car is a certain sign of success, and to many buyers it meant nothing to lose 25% or more depreciation in the first twelve months, as long as there was a new car in the driveway and it had all the latest technology. With the poor economy, buyers are now finding it more practical to let someone else pay the depreciation, and pre-owned vehicles are becoming a hot topic.
Another factor motivating the trend is the reliability of used cars. With the technology used on today’s cars, a used car buyer is no longer throwing money at an unknown. If the vehicle has enjoyed good care, and continues to be tended to, there’s no reason that any Honda or Toyota (or many American-made models, for that matter) cannot last well past the 200,000 mile mark. Certified pre-owned cars make it a safer bet to buy used, but many dealerships are seeing a request for used vehicles under $10,000.
What does this trend mean for the consumer? A person buying a used car may pay a little more for it now than he would have a year ago, but then again, trade-in prices on relatively late-model vehicles may increase as well, as the supply and demand of used cars continues to waver. It also means fantastic bargains for someone looking to buy new. Go ahead and trade in that used sedan and get a little more than normally offered, and buy a new vehicle with better incentives and lower process than ever before.
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