Typically, what you think is the price of used cars should go down year after year. That’s correct! However, there are some scenarios where they do not turn down in terms of the price. Instead, it goes up, making the value unaffordable, although the peak usage has already been attained. Some situations when the used cars become more expensive are discussed thoroughly below. Make sure to read these points and make your own decision afterward.
Cars in their newest state are much more aesthetic and worthy. You can actually pay the dealer a good chunk of money based on the market rate. After it’s been used for year after year, it gets depreciated at a specific price. Usually, Edmunds claims that the car will get an annual depreciation of 15-25%. Some of the famous analyst claim that once you ride your car, its value will lower by one fourth instantly. So, the process gets continued, and there will be a specific period where you feel that the price is constant. This is the stagnation point.
Actually, these used cars attain stagnation point after a significant number of years. So, this state of not moving the price downward triggers the purchaser a thought, which is the price is actually high. After it gets to this period, people begin to observe these cars as not an old material, but old ones. These types of tags on such cars propel the marketing scheme to make a high rate of standard.
Giving Names Classic or Vintage Models
What do you call when you see the car models of the 1980s and 1990s? Your first impression would be highly charismatic. No wonder, your inner self would like to drive the car for at least some distance. Such classic models are the main reason for the price of used cars going up in the market. We are often driven by the movies of James Bond when he uses the vehicle of his generation. Mainly, car enthusiasts would find their heart-pounding even after seeing it on the screen. You cannot have expectations of what they would feel if they get a chance to drive. Such emotions are surreal.
The price tag of such “classic” cars goes up once people related to the film industry, collectors, and aficionados try to reserve them or buy them at a high price. Talking about the film sector, according to the genre, especially for the romantic and lavish films, directors would like to cast their scenes taking these so-called “vintage” cars. Peoples then certainly watch these scenes and figure out that they need a similar vehicle, which their favorite actor is using. More often, music videos are the sectors, which quite often use these cars to make their song look like they worth at least one view from their audience. Actually, the viewer perceives the importance and tries to buy in the market. By that time, the car would be much expensive, giving them the title of “classic” or “vintage” cars.
With the advent of new technology, the cars are manufactured relatively in a much better configuration than it had been previously. The mechanical parts do not wear off too soon, which leaves the market to attain a reasonable price tag on it, even it is being used previously. So, these days the quality of cars both in terms of performance and beauty keep up their performance. Like, consider a car which your father purchased fifteen years back, and the one you bought recently. If you ask your father about the quality, then certainly yours is better.
For instance, if you bought a car in 2010, ten years ago, unless it is Toyota or Honda, you have the best scenario that it would function well in 2023. On the other side, your father’s car, which was purchased in 2000, would be junk by the time of 2010. Such comparison often drives the person to seek for the used car, even it cost you a fair amount of money. With some repair works and maintenance, the vehicle nowadays would work efficiently and gives much better performance. Thus, used cars of today have a good value. That’s the reason for the price hike of the used cars in the present context.
Demand v/s Consumption
Evidently, cars after a particular time get depreciated. According to Edmunds, usually, these cars lose value by about 20% every year. However, in this imperfect market, some cars would be there, which will never saturate the demand. Once the production company thwarts its manufacturing process, there will be a high demand for such vehicles. Even after people sell their cars as a second hand, the market will always be in consuming mode. With such a requirement, the used cars would not suffice the need of the customers. This way, the dealers can make excessive money by hiking the price.
One of the real experiences is of the Audi. The previous year a customer tried to sell his car. Luckily, he canceled to sell it at that time. One year after, the same Audi was sold at 15% more money than it was before.
From the last recession, buyers were hesitant to buy a new car. In fact, they were buying a large number of used cars to maintain their economic condition constant. There were facts from the authorities that the purchasing volume of new cars was notably down. So, this led the market to have less number of used cars. So, what do you think the dealers would do now? So, obviously, the value of the used car went upright.
From this COVID-19 pandemic, what would you expect about the price of used cars? Clearly, the manifestation of the market will be to increase the cost of used cars to some amount. This is because buyers will now be hesitant to buy new cars. In every aspect, their main motive is to save as much money as it is possible. Yes, to some extent, buying used cars is cheap compared to new ones, but not as cheap as it was a year or a two before.
Before buying a used car, it’s always prudent to check the car’s history report by quickrevs to find out whether the car is clean to buy or not. It’s completely worth your time to implement this step as a crucial one. As you will be spending a long time with your car, you do not want to get in trouble with the legal clearance and problems resulted due to the bad history.