Its the first time since 2008 that prices of used cars are falling

by SpeedLux

Used car rates look set to suffer their first significant decline since 2008. And the likely perpetrator is the strong variety of new car sales.

As per “NADA Used Car Guide,” utilized car rates will fall 5 to 6 percent this year. And while some might be lured to draw from that negative conclusions about the United States economy, NADA executive expert Jonathan Banks discusses that the drop is reflective of increasing supply, instead of falling need.

“2016 marks the very first year where we have a material boost in used supply,” Banks stated Friday on CNBC’s “Trading Nation.”.

He discusses that recently, record-high secondhand car prices have been spurred by a lack of used automobile supply, which in turn was brought on by low new vehicle sales as a result of the economic downturn. That pattern is now reversing.

The provision of used vehicles “is driven by 2013 lease returns coming back into the marketplace, which represents about an 800,000 increase compared to 2015,” Banks stated.

In that method, the drop in used automobile costs is “a byproduct of the strong brand-new vehicle sale success we have actually been having”.

Will used car costs continue to drop, as cars that were leased when brand-new continue to come back onto the market?

It’s possible, says Banks, including that “one of the wildcards is the new vehicle incentives”.

There is “more danger” of lower costs “if there’s a continuation of the rewards that are stoking brand-new automobile sales,” he stated.

You may also like

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

SpeedLux

SpeedLux is a high-authority automotive blog providing the latest automotive news and reviews. SpeedLux covers everything related to cars, bikes, and motorcycles, from news and reviews, to troubleshooting guides, tips and tricks, and more. SpeedLux was born in 2009 and we have over 20,000 articles published on our blog. We thank all our readers, as well as our partners, without whom we could not have reached this level.

Subscribe

©2009 – 2024 SpeedLux – Daily Automotive News and Reviews. All Right Reserved.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More