Used car prices are up?!

[JustMe]

So, I finally decide I really do want to get a newer used car and am finding prices higher than I expected even on kelly blue book/edmonds, etc. I wondered why this was and even if I was using the sites wrong. Then yesterday I went into one of those no-haggle/we make the same amount on every car places, and the guy told me that used cars are more expensive right now due to the economy. I looked at him like he was crazy (and sat there wondering if I was crazy) when he explained to me that due to the economy some people who would normally buy new cars are buying used cars, so the demand is higher and prices are higher. Lovely. Anyone else hear about this, notice it, etc?

[BabyDahl]

Yep, DH is actually going to sell his Scion because prices are up for used cars and Toyota cars are in low supply (due to issues in Japan). Definitely a trend, particularly with Japanese cars and autos with good gas mileage.

[Reyadawnbringer]

DH and I noticed this just yesterday as we began to finally look at used cars for ourselves. Now we are even further away from being able to get a reliable vehicle and I won't have anything to get me to an from work beginning in oct.

[mytwosons]

DH needed a cheap, but reliable used car a year ago and it was extremely hard to find. He had $10k cash he planned to spend, but ended up buying a slightly older model for $5k because that was all he could find.

I have a newer model civic and get mailers from the dealerships weekly attempting to get me to trade it in.

[Melbel]

Yes definitely. It has also been in the news for several months.

http://moneywatch.bnet.com/spending/blog/cars-money/used-car-prices-surging/2854/

DH is trying to use his higher trade in value to get a new car (conveniently failing to note that the new car he would want has also increased in price). His car is paid off, so I am not anxious for a new payment.

[JustMe]

Thanks for the replies and the article. I guess I will need to wait on this. Maybe I would get more back if I traded in my Toyota Corolla, but given that its a 98 it probably wouldnt make up the difference of the inflated price in the newer used cars.

[amldaley]

Yeah, one of our used dealerships in the area is advertising to buy people's cars - not trade - just buy - to stock their inventory.

We heard through a friend who has the same vehicle we do (2010 Fusion Hybrid) that we would be able to sell it right now for the same or more than we paid for it. I am tempted...but I also really love my car.

[khm]

This is all second hand info, so take it for what it's worth. But, a guy at work just leased a Nissan Altima. He said they are having some sort of deal where they were sooooo busy, THEY had to seek out the salesman. The salesman showed them the numbers, they could lease an Altima for 3 years, then choose to buy it at the end for a pretty good number. The salesman put a sold sign on it for them, and let them come back in 48 hours to sign the paperwork. He did not pressure them at all, said "If you don't come back, no problem" waving his hand at the show room that was completely full of shoppers.

My point is, I wonder if "leasing then buying it out in the end" is a good option today? I know it was for my husband in the mid-90's (we still have that Accord, what a good car!). The lease payments were low, he saved the difference of where a sales payment would have been and bought it with cash in the end.

That's what the guy at work is planning on, he ran the numbers both with paying cash at the end and with financing some of it and he always comes out better doing the lease first by a considerable amount. Obviously, "they" hope you'll just lease another one, but he isn't planning on that option! He's negotiated that end payment because that's the best way to go.

[Melbel]

This is all second hand info, so take it for what it's worth. But, a guy at work just leased a Nissan Altima. He said they are having some sort of deal where they were sooooo busy, THEY had to seek out the salesman. The salesman showed them the numbers, they could lease an Altima for 3 years, then choose to buy it at the end for a pretty good number. The salesman put a sold sign on it for them, and let them come back in 48 hours to sign the paperwork. He did not pressure them at all, said "If you don't come back, no problem" waving his hand at the show room that was completely full of shoppers.

My point is, I wonder if "leasing then buying it out in the end" is a good option today? I know it was for my husband in the mid-90's (we still have that Accord, what a good car!). The lease payments were low, he saved the difference of where a sales payment would have been and bought it with cash in the end.

That's what the guy at work is planning on, he ran the numbers both with paying cash at the end and with financing some of it and he always comes out better doing the lease first by a considerable amount. Obviously, "they" hope you'll just lease another one, but he isn't planning on that option! He's negotiated that end payment because that's the best way to go.

The article above also mentions some good deals on leases, but cautions:


If you do sign a lease, however, check out carefully your option to buy the car when the lease is over. This traditionally has been a reassuring option, with the future sale price to you stated in the lease. But rising use car prices means leasing companies are eager to get the car back at lease-end, rather than sell it to you. Linda Goldberg, owner of CarQ (http://www.carq.com/) car-buying service reports that recent leasing clients have found that General Motors lease contracts added a $2,300 penalty if the leasing consumer buys the car. You might be able to renegotiate such a clause.
I could see an unethical salesman burring the fee in the fine print of the lease contract, so buyer/leaser beware!

[khm]

The article above also mentions some good deals on leases, but cautions:


If you do sign a lease, however, check out carefully your option to buy the car when the lease is over. This traditionally has been a reassuring option, with the future sale price to you stated in the lease. But rising use car prices means leasing companies are eager to get the car back at lease-end, rather than sell it to you. Linda Goldberg, owner of CarQ (http://www.carq.com/) car-buying service reports that recent leasing clients have found that General Motors lease contracts added a $2,300 penalty if the leasing consumer buys the car. You might be able to renegotiate such a clause.
I could see an unethical salesman burring the fee in the fine print of the lease contract, so buyer/leaser beware!






WTH, GM? Wow, just add the $2,300 to the bottom line!! What a jerky move. "Penalty" my bum.

Yeah, it would totally have to be researched before making a decision in TODAY'S market. It's interesting how the market flexes. One year used cars are all the rage, then no-interest new, then leasing, then it all restarts.

[wendmatt]

Yes, I recently got my car written off and wanted to buy a used car. Many were more expensive than buying new, which I always said I would never do. I ended up buying a new Ford Fiesta for $15, 000 total with tt&l. I wanted a Corolla or Yaris and they were higher than that for a fairly new used car.

[vonfirmath]

So, I finally decide I really do want to get a newer used car and am finding prices higher than I expected even on kelly blue book/edmonds, etc. I wondered why this was and even if I was using the sites wrong. Then yesterday I went into one of those no-haggle/we make the same amount on every car places, and the guy told me that used cars are more expensive right now due to the economy. I looked at him like he was crazy (and sat there wondering if I was crazy) when he explained to me that due to the economy some people who would normally buy new cars are buying used cars, so the demand is higher and prices are higher. Lovely. Anyone else hear about this, notice it, etc?

Also, note not that long ago a lot of used cars were taken off the road -- destroyed when the government gave folks incentives to buy new cars if they took the used cars off the road. At the time, folks said that it was going to cause the cost of the remaining used cars to increase.

Then there is the earthquake in Japan that is decreasing supplies of new Japanese cars in our market as well.

[09Mom]

And add to that the number of natural disasters that we have recently had in the us that destroyed cars.

[wellyes]

Also, note not that long ago a lot of used cars were taken off the road -- destroyed when the government gave folks incentives to buy new cars if they took the used cars off the road. At the time, folks said that it was going to cause the cost of the remaining used cars to increase.

Then there is the earthquake in Japan that is decreasing supplies of new Japanese cars in our market as well.

I was just talking to my DH about this. Cars with terrible mpgs were supposed to be scrapped. But apparently many of them instead ended up being sold In developing nations (mostly Mexico ). Not very sensical.

[JustMe]

Ah all very good points. Not happy points, but good points.