More people are going to car showrooms to shop for vehicles. For those shoppers who want a one-, two- or three-year-old car, the prices could be shocking, says N.C. Cooperative Extension economist Mike Walden.
“The prices are up for these gently used or newly used cars. In fact, some surveys show the price is up about 5 to 10 percent in just the last few months. And there are a couple of reasons for this.
“One, the Cash for Clunkers Program took a lot of cars — all used cars, especially newly used cars — off the market. So that affected supply. And also the recession’s had a big impact, because typically what you see during recessions is people keep their cars longer. They don’t buy new cars because they can’t afford to. And so what this means is the typical household who may buy a new car, keep it for a couple of years, then want to buy another car — that didn’t happen over the last couple of years.
“So not only due to Cash for Clunkers but simply due to buy habits, there’s simply not the supply of newly used cars out there. So this is certainly bad news for people who are trying to buy a newly used car.
“But it’s very good news for people who have these one- to two- to three-year-old cars that are in good condition. Dealers want them, and you can probably get top dollar.”