Why 2016 is a Great Time to Buy a Used Car
You might have noticed a significant increase in the number of vehicles that used car dealers in Albany, NY have been carrying. That’s because the number of used cars on the market directly correlates with the amount of cars leased in previous years and there have been a lot of leases in recent years. Since 2009, new car sales have increased dramatically, and most of those cars were leased. But, 2012 was when the leasing really began to pick up.
Since most leasing agreements are typically terminated after a three-year time frame, that puts 2016 right in the line of sight for an explosion of used cars hitting the market.
Higher Car Sales Resulted in More Leases
Overall, new car sales rates have increased 68% since 2009, specifically, from 10.4 million new cars sold, to 17.5 million sold in 2015. This is an astronomical increase in sales, and attributed to 2009, when the economy started getting better. This explosive growth caused more people to lease than buy however, and from 2012-2013 the rate of people leasing rose 26%. Even though leasing picked up in 2010 after dropping to a low of just one million, it’s not until 2012-2013 that the market experienced a significant increase.
All of these factors played a significant role as to why we have as many used cars on the market today. Not only is there a broad selection of like-new condition used vehicles on the market to pick from, but the price of these vehicles has steadily dropped as well.
Thanks to the flood of used cars that have arrived on the 2016 car market scene, prices have dropped. The prices of these three-year old vehicles have been discounted by about 4% year-over-year in 2015, according to Edmunds.
The best part is, as long as the monthly lease payments still keep buyers interested, the price of used cars will continue to stay low. This high vehicle supply and large amount of leases is what’s really brought the used car market back from the dead, and no doubt these low prices will appeal to anyone looking for a newish-used car.
Also, this trend is still in its early stages. 2016 is just the beginning for low used car prices, and it is expected to continue on for quite a few years. Here’s why…
Lease Deals at the Highest Level in 2015
The lease deals saw a jump from 2012-2013, but the year that the lease deals were at the highest level? 2015. This means along with the influx of used cars for 2016, we can expect to see even more used cars coming in around 2018-2019. The amount of vehicles leased since it started to pick back up again? Just under four million in 2015.
Why have leases picked up though? Well, it was a combination between the economy bouncing back in 2009, and the fact that leased vehicles have a low interest rate and maintain their value through the leasing term. Therefore, there was and continues to be much more incentive for new-car buyers to lease instead of buy outright.
Putting the cherry on top of this sweet situation, the spike in leasing has allowed dealers to offer much lower monthly leasing payments, making it even more attractive to lease instead of buy.