Small Used Cars Currently Provide the Best Deal on the Market
Thinking of shopping around on the lots of used car dealers in Albany? If that’s the case, you might want to consider not just buying any used car. Instead, buy a small used car. Currently, those offer the best deals on the used car market. In an almost ironic way, the price of used cars is increasing with the size, which makes larger trucks and SUVs on the other side of the spectrum the most expensive used vehicles to buy right now.
Why are small used cars doing so well, and why are trucks and SUVs so costly in the used market? I’ll explain all that and more, along with whether or not you should consider buying a small used. But first, let’s take a look at the sales numbers.
Edmunds (LINK: //www.edmunds.com/industry-center/data/used-car-market-quarterly-report.html) — a very authoritative and credible source on all things car related — released one of their Used Market Quarterly Reports back in August. This report provides data on the sales and pricing trends of used cars that are currently booming in the car market. With used car sales on a steady rise, reading these Quarterly Reports is more important than ever. That way, you know what to buy in order to receive a bargain deal.
Going into the homestretch of 2016, it looks like that car is anything that would fall under the small category. Subcompact vehicles like the Chevrolet Sonic, Ford Fiesta, Hyundai Accent, and Toyota Yaris all fall into this category and are providing an extremely cheap way to get on the road right now. Prices on subcompact rides like those listed above have dropped 6.3% in the past year, down to an average of just $11,461. In the car market, that price is so cheap that it’s considered chump change.
If you want something a little bigger, then compact cars like the ever-popular Chevrolet Cruze, Ford Focus, Honda Civic, and Toyota corolla have dropped by 2.0% in value, which translates to an extremely affordable average price of $12,153 within that segment.
On the other side of the price spectrum, SUVs and trucks are experiencing terribly sharp price hikes. Trucks, in particular, are having a rough time, and have gone up 10.1% over the last year. The segment average is approximately $18,978. Larger SUVs rose by 8.9% over the past 12 months, up to an average of $26,852.
What’s the Reason?
“If you’re a used car shopper in the market for a small vehicle, this is a great time to buy,” says the Sr. Analyst of Edmunds, Ivan Drury.
While this is almost a face-palming obvious quote simply from looking at the numbers above, what’s the reason behind this? I’ll let Mr. Drury explain that for you as well: “Prices are down for these vehicles because there is so much more demand for used trucks and SUVs. There are also lots of smaller cars coming back to the used car market as people trade up into larger vehicles.”
Let’s look at this a little more closely. What we have here is a two-part reason why small cars are such a great value right now. First and foremost, it’s because everyone wants used trucks and SUVs. No doubt thanks to the blessedly stabilized gas prices we’ve been lucky to have all throughout 2016. Buyers aren’t afraid of the price of fuel right now — clearly — so there are no repercussions for driving what they really want.
Secondly, as a result of the spike in demand for large used trucks and SUVs, consumers are trading-in their smaller cars to put towards the value of their “new” truck or SUV. This creates a surplus of smaller used cars, which is a bad thing for dealers. Why? If they can’t move them off the lot, then they’re just taking up space. Since everyone is after those larger used vehicles, the only way to really move smaller used cars is by dropping the cost of vehicles in that segment down to staggeringly-low prices.
While this is bad for used car dealers, this is great for the used car consumer in the market for a smaller vehicle. It means you have a wide array of vehicles to pick from, all of which are found at very affordable prices.
Should you Buy a Small Used Car?
Should you buy a small used car from the subcompact and compact segment? If it’s what you’re interested in, then yes. If you don’t mind driving a smaller car, then yes. Even if you might not want to buy a smaller car, then give it some thought and decide on yes. Right now, the only person who shouldn’t be buying a small car is someone who needs a vehicle for contracting work in a manual labor position. Here’s why:
While a lot of it boils down to preference, the deal is almost too good to be true right now. Keep in mind, those extremely low average prices mentioned above were taken from all the used cars in the subcompact and compact segment. Which means it considered the price of cars that are being sold used from 2015 and 2016, as well. It also includes CPO (certified pre-owned) vehicle pricing. Therefore, you really can get a killer deal on a subcompact or compact car right now. Even if it’s a higher trim level, and one that’s only been lightly used.
Also, you have no idea where the gas prices are going to go. They’ve been stable all year, sure. But, you might have noticed some gas stations featuring prices that are slowly, but perhaps steadily, increasing their prices. Therefore, why not get ahead of gas prices once and (hopefully) for all? That way if they do go back up, you won’t be worried about rushing to trade in your larger vehicle.
Hey, it could happen again. It’s not like gas prices have really been stable for the past 10-20 years. Anyway, those are just a couple of the reasons to buy a smaller used car. The ultimate reason perhaps is because of the immense value for your dollar you’d get if you bought one.