Demand for Used Vehicles Rises as Price Gap Between New and Used Vehicles Grows
With many motorists priced out of the new vehicle market, those consumers are turning to the pre-owned market instead
During this past summer, The News Wheel published several articles about how the price a used vehicle is on the rise. Yet, it would seem that the price of new vehicles is increasing even more than that of their used counterparts.
As such, the demand for used vehicle models is expected to rise even more this year.
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As it stands right now, the average price of a new car lands somewhere around $36,848. That’s an all-time record high for average new vehicle prices.
This price increase is due to several factors. Chief among those factors is the shifting consumer taste toward SUVs and trucks, which cost more than the traditional passenger car.
When many customers go to buy a new car, they discover an asking price that is simply too high for them. In turn, they choose to buy used instead.
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Even in the used market, drivers will likely discover asking prices that they are not accustomed to. The average price of a three-year-old vehicle is now somewhere in the vicinity of $22,489.
Fewer used vehicles are originating from rental fleets or repossessions, which typically bring down the average price of pre-owned models. Much like with new vehicles, the average driver is looking for a more expensive pre-owned utility vehicle or pickup truck.
Even with used vehicle prices on the rise, the price gap between used models and new ones is growing larger. Therefore, new vehicle sales are projected to decrease for the remainder of the year, as many motorists will be priced out of the new market.
Overall, consumers can expect to see higher pricetags the next time they go vehicle shopping. With a rather stagnant wage growth, that can make obtaining a daily driver more of a financial frustration than ever in the near future.