While shopping for a car this last month, I started to realized that buying a used car didn’t look very attractive. For some reason prices were, really, really high — and, for the first time, we considered buying a new car instead.
The day after explaining my theory to a coworker as to why prices were high, NPR aired this short piece detailing the phenomenon.
ONARI GLINTON: When the economy was really bad, car companies didn’t produce as much. So, there are fewer 2008, 2009, 2010 used cars. Less supply, and on the demand side…
…and of course with the economy coming back, but people still wanting to save money, the demand side for used cars is high.
One month later, the NYTimes reports that prices are still climbing:
Prices for used cars have been on an unprecedented upswing, and analysts do not foresee a leveling off during summer. The conditions are upsetting the long-held assumption that used cars are always better deals than new ones.
But they also point to the other part of the supply problem,
The supply problem has deepened following the March earthquake in Japan, which has produced shipment delays of vehicles and parts and curbed production in the United States.
So it’s really a combination of a bunch of different factors, with the bottom line being that it’s a really bad time to buy a used car.