From an economics point of view, buying a used car have not been your best bet in 2023. The rising inflation, economic recovery post covid has shifted market prices as well as interest rates significantly. Used car prices in 2023 has been stubbornly high and is still on the higher side. Although we are now seeing the market slowly settling down. “The last several months have followed very closely to 2019’s levels, the last normal year we’ve seen,” said Chris Frey, senior manager of Economic and Industry Insights at Cox Automotive.
Used Care Buying Market Trends
The U.S. inflation rate currently sits at 3.0%, compared to 4.0% last month and 9.1% last year. This rate is the lowest since March 2021 and is significantly contributing to recent used car trends. Inflation was a key factor that drove up the used car prices to begin with. The fact that it is heading in the right direction is an assurance that there are better times ahead for used car buying.
However, supply and low inventory is still a worry. According to Kelly Blue Book, inventory has stabilized, but because automakers built eight million fewer cars during the pandemic, used car lots might be emptier than both dealers and buyers would like “for years.”
Given the low inventory and high demand, if you are in the market to buy a used car you need to be extra careful. The opinion if many used car dealers is that the quality of the inventory right now is much worse than it worse. Therefore, make sure you take necessary precautions before making your used car buying decision.
Things to Remember Before Making the Used Car Buying Decision
When buying a used car, diligence is necessary to avoid potential pitfalls and make informed decisions. Here’s a checklist of precautions to consider. 1. Set a budget: Determine how much you are willing to spend, including insurance, registration, and potential repairs or alterations.
2. Do your research: Research and consider models that are known to be reliable and meet your needs and preferences. Look for common issues or associated with your favorite models. Compare your details to make an informed decision.
3. Viewing Vehicle History Report: Get a vehicle history report by the vehicle’s VIN (Vehicle Identification Number) through services like Carfax or AutoCheck. Check for any accidents, title information, odometer readings, and salvage titles.
4. Inspect the car: Check the condition of the exterior and interior of the vehicle. Check for wear, corrosion, and tire condition. Check the condition of fixtures, electronics, and other items.
5. Check the fluids: Check the oil, transmission fluid, brake fluid and coolant to ensure they are at the correct level and in good condition.
6. Test Run: Conduct comprehensive testing to evaluate vehicle performance, handling, and unusual noise or behavior.
7. Professional Inspection: Have a trusted mechanic inspect the vehicle to identify any potential problems or items that need repairs.
8. Verify ownership and documentation: Make sure the seller is the legal owner and has the right to sell the vehicle. Confirm that the vehicle’s Vehicle Identification Number (VIN) matches the VIN on the title.
Don’t Forget to…
- Negotiate pricing: If you find any problems or need repairs during your inspection, use this information to negotiate a price.
- Check Market Value: Verify the selling price is in line with the current market value for the make, model, year, and condition.
- Review Contract and Warranty: Carefully review the sales contract and any included warranty or return policy.
- Secure Financing: If not paying in full upfront, secure financing with favorable terms from a reputable lender.
- Finalize Insurance: Before finalizing the purchase, arrange for the necessary insurance coverage.
- Complete DMV Paperwork: After purchase, complete all required DMV paperwork, pay any applicable fees, and ensure the vehicle is legally registered in your name.