When Will Used Car Prices Drop?
Car prices have remained relatively steady throughout 2020, however, used car prices remain to be seen. As new car prices continue to rise, more people have opted to shop for used cars as an economical alternative in order to save money.
Factors Influencing Used Car Prices:
- Supply and Demand: As demand for new cars decreases, more used cars become available for sale. This influx of used cars in the market can cause used car prices to drop.
- Ag Maintenance: The longer a used car’s life, the cheaper it tends to be. Cars that have aged require more frequent maintenance and could lead to an overall depreciation in their value.
- New Car Prices: As new car prices continue to climb, used car prices become much more competitive. When buyers find new cars too expensive, they tend to look at used cars as an economical alternative.
- Interest Rates: Low interest rates make financing cars more affordable, leading buyers to purchase used cars. Low interest rates also make cars more affordable when purchased with cash.
What to Expect in 2021:
It is hard to predict when used car prices may drop, but due to the current market, experts believe that used car prices could start to plateau in 2021. As restrictions ease, more dealerships will reopen and more new cars will become available, leading to an increase in demand.
As the demand for used cars decreases, dealerships will also be more willing to negotiate on prices. This means that buyers will have more bargaining power when it comes to used car purchases.
Used car prices can be unpredictable, but there is some hope that prices could start to go down in 2021. As the supply and demand of used cars adjusts, buyers can look forward to more competitive prices. With low interest rates and dealers willing to negotiate, it could be the perfect time to get your hands on a used car.