Why there are so few used cars around and what does this mean for the consumer?
It all begins with the uncertainty of the new car market in 2008-2009. When the new car manufacturers stopped leasing, this not only limited the number of used vehicles entering the used car marketplace, but also caused the prices to increase.
The cause and effect is now you have fewer cars but the same number of car dealers bidding on them at the auctions. This will cause the prices to increase. I dont think it has trickled down to the consumer yet but it is definitely going to.
The uncertainty of the economy is another factor; consumers are hanging on to their cars longer. They are going that extra mile hoping they can squeeze another year or two out of their vehicle.
Another factor is the new car incentives like Retire your Ride or Cash for Clunkers. Retire your Ride has taken over 100,000 cars off the road and Cash for Clunkers has mirrored that. I am not saying that most of these cars shouldnt have been taken off the road, but a few that I have seen, had many years left. These cars usually sold for little money, to families or students on a budget. These consumers are now forced to look at newer cars at a higher price.
So the next time you are shopping for a used car keep in mind that there are fewer cars around and the vehicle you may look at today, someone looked at yesterday. If you see a car you like, you may want to purchase it because by the time you decide to go back to the dealership the car may be sold.