It’s been a few months since the earthquake and tsunami disaster in Japan. But the effect of these disasters is still felt in the automotive industry. With plants and factories taking longer to regain operations in the East, supplies of vehicles have plummeted.
To make matters worse, Japanese brands are not the only ones affected. Even American and other car brands import parts from Japan. The struggling economy and soaring gas prices don’t help the automotive industry either.
Because of these factors, the demand for used cars has spiked higher now. More people are finding it practical to purchase fuel-efficient car models from 2001 to 2006. According to the Federal Bureau of Transportation Statistics, used car sales are outselling new car sales by a ratio of 3.3-to-1. This is the largest sales ratio ever recorded since the bureau tallied comparable numbers 21 years ago.
However, this continuous increase in demand also means that more people are bidding for these used car models – and you know what that means: higher used car prices.
Just a year ago, a year-2000 car model may have fetched around $4000 to $5000. These days, expect prices to be at the $13,000 mark.
Is it good news or bad news?
Car buyers will naturally look at this as bad news. However, with older cars appreciating in value, now is becoming the best time to sell a vehicle. This is particularly true for those who have an extra car they can afford to part with. And while used car prices are up, trading your old vehicle in at an appreciated cost can help you keep your overall costs down.
Of course, you must do your research before selling or trading to make sure that you are getting a fair price on your old vehicle.
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