2009 proved to challenge car shoppers - while one might have thought to find a nice price on a pre-owned vehicle, sticker shock even among used lots likely prevented a few sales. With the new year, the possibility of lowered prices grows as the economy settles, which may lead people to wonder why prices fluctuate on used cars. If a car is brought in after a number of years, shouldn't the price be set in relation to wear and tear? Not necessarily.
What determines the pricing of used cars? Naturally, everything is set according to the current state of the economy. When times are tough, one might expect retailers to lower prices in order to entice customers to shop. However, in some situations a questionable economy may lead to a shortened supply of things, which in turn affects the cost in another way. Last year, we saw this in the automotive industry.
As gas prices fluctuated and skewed high, this likely inspired car owners, rental companies, and other businesses reliant on transportation to hang onto cars rather than upgrade to newer models. Even though hybrid cars on the market presented the opportunity for drivers to work more efficiently, the burden of taking on another large payment may have detracted sales.
Buy-back programs designed by the government last year to relieve drivers of gas guzzlers also factor in pricing. Where such cars might have been filtered to used lots for resale, many of these cars and SUVs were destroyed, thereby limiting the supply. When owners are overall reluctant to trade in, and fewer used cars hit the market, it affects the cost of what is available.
Will these change in 2010? Predictions lean toward lower used auto prices in the coming year. If you have something to trade, that definitely will help your cause toward obtaining a good price for something else.
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