Every year at this time, you usually hear auto-buying experts extolling the virtues of why right now is a great time to buy a last-model-year vehicle or what a deal used cars would be at year-end sales events.
But not this year!
Why you may want to hold off until 2018 to buy a car…
New numbers from auto auction company Manheim show a tremendous spike in the value of used cars in the U.S. over the last year.
The average used vehicle price of $13,599 in October 2017 was up 8.1% versus the same month a year ago. That is a massive price movement.
The reason behind the extreme jump? This hurricane season has disrupted the vehicle market all over the country.
While we’re still waiting for exact numbers, somewhere in the neighborhood of half a million to 1 million vehicles were destroyed by storms — primarily in parts of Florida, Louisiana and Texas. And even though that’s regional, we have a national auto market and the repercussions are felt throughout the industry.
All the demand created by those people getting into new rides is impacting overall supply. And less supply amid increased demand means higher prices.
So, with that in mind, there are a few things to note here.
First, if there’s a spare vehicle in your life that’s not getting a lot of use, this is the time to sell that car into the used market. Dealers need inventory on their used car lots, and you will get much better offer right now than you historically would have.
On the issue of buying, it’s true there is a lot of pain because of the supply issues mentioned above.
But here’s the sweet spot to that story: If you’re trading in a vehicle and getting a new one, your trade-in will be worth more right now than it would have historically it would have.
So, normally I’d be telling you about all the deals available at this time of year. But right now, not so much!
If you plan to sit the end-of-the-year sales thing out and wait until 2018, I’ve got guidance for you in my “Clark Smart” steps for buying a new car and my advice on how to buy a used car — which is my preference for buyers.