Used Car Prices Higher Than Ever

[Angio333]

Used Car Prices Higher Than Ever
By Gary Hoffman

Bargain-hunters in the used vehicle market are in for a rude awakening: prices are now at historic highs after rising hundreds or even thousands of dollars a unit over the past few years.

Lately, the used-car market has thrived as the new-car market has struggled. The problem for consumers is that used-vehicle demand has outstripped supply, sending prices skyward. It's not unusual for price tags to be up $3,000 in some product segments in the last five years.

You can read the entire article here:
Used Car Prices Higher Than Ever
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What do you think?

[scfr]

When I did my last net worth statement, I ran the KBB Private Party Values on both of our vehicles. Was surprised to see that the value of our '99 Camry had actually INCREASED by $300 compared to a few months ago. That offset the $300 decrease in value of our less-than-one-year-old vehicle.

[krantcents]

Originally Posted by Angio333

Used Car Prices Higher Than Ever
By Gary Hoffman

Bargain-hunters in the used vehicle market are in for a rude awakening: prices are now at historic highs after rising hundreds or even thousands of dollars a unit over the past few years.

Lately, the used-car market has thrived as the new-car market has struggled. The problem for consumers is that used-vehicle demand has outstripped supply, sending prices skyward. It's not unusual for price tags to be up $3,000 in some product segments in the last five years.

You can read the entire article here:
Used Car Prices Higher Than Ever
--------------------------------------------------------------------

What do you think?

This could make a case for buying a new because of the financing deals! Don't go nuts, it helps to compensate for some of the depreciation. I am hanging on to my 16 & 14 old cars. At least for the near future!

[cptacek]

How many used cars were destroyed because of Cash for Clunkers that otherwise would now be in the used car market? Isn't this really what is pushing the cost of a used car up?

[radionightster]

Originally Posted by cptacek

How many used cars were destroyed because of Cash for Clunkers that otherwise would now be in the used car market? Isn't this really what is pushing the cost of a used car up?

I bet people up in the north east wish they had some of that "global warming" now

[bjl584]

Used cars have become very popular in recent years. People are also keeping their cars longer than ever. You may pay a premium price for a used car these days, but paying cash for a used car still is and always will be a better financial move than financing something brand new.

I've heard people argue that it's better to buy new because of the lower interest rates. The problem is, these people are speaking in terms of financing. If you're paying cash, like many on here advocate, then used is the way to go.

[disneysteve]

Originally Posted by bjl584

I've heard people argue that it's better to buy new because of the lower interest rates.

That argument almost never makes sense. It is true that interest rates are lower on new cars than on used cars, but the car costs more so that cancels out the advantage.

I just checked bankrate.com. The average 3-year new car loan is 5.34%. The average 3-year used car loan is 5.95%. But if the new car is $25,000 and the used car is $18,750 (25% less), you'd have a payment almost $200/month less with the used car despite the higher interest rate.

[bjl584]

Originally Posted by disneysteve

That argument almost never makes sense. It is true that interest rates are lower on new cars than on used cars, but the car costs more so that cancels out the advantage.

I just checked bankrate.com. The average 3-year new car loan is 5.34%. The average 3-year used car loan is 5.95%. But if the new car is $25,000 and the used car is $18,750 (25% less), you'd have a payment almost $200/month less with the used car despite the higher interest rate.

Personally, I like my car payment. $0.

[disneysteve]

Originally Posted by bjl584

Personally, I like my car payment. $0.

We haven't had a payment since 2002. Of course, we haven't bought a car since 2002 either. I may or may not pay cash next time around. Sometimes, I take a loan at time of purchase just for cash flow reasons but then pay it off well ahead of schedule. We have money set aside but if both of our cars happen to die in a short time period, we would probably need to borrow for at least one of them.

[SavingAdvice]

People rather spend $4000 vs 20000 for a new car saves them quite a bit.

[bjl584]

Originally Posted by disneysteve

We haven't had a payment since 2002. Of course, we haven't bought a car since 2002 either. I may or may not pay cash next time around. Sometimes, I take a loan at time of purchase just for cash flow reasons but then pay it off well ahead of schedule. We have money set aside but if both of our cars happen to die in a short time period, we would probably need to borrow for at least one of them.

My stepdad has purchased both cars and motorcyles over the years by financing them with 0% interest rates even though he had the cash to pay for them outright. His argument was that he could get a better return with his money elsewhere. I see that topic come up quite a bit on here.

[elessar78]

Now did he actually put the money elsewhere to earn more? If he did, did he account for risk if it was in anything more volatile than a CD or Money Market Account?

I'm sure it wasn't the case with your stepdad, but the vast majority of people who "flaunt" their saavy on interest rates and doing this and that tend to be full of it.