In a simple case of “supply and demand,” market conditions have forced the price of used vehicles upward, according to this story from the Detroit News (click here to link). The story was brought to my attention by the Automotive Digest daily newsletter.
Implications: The economy has inspired many car buyers to consider used instead of new, so demand is up. The recent cash-for-clunkers program took many pre-owned vehicles out of circulation, so the supply is down. Those dynamics have led to higher prices for used cars and trucks, and might lead to greater success of leasing and special incentive programs on new vehicles this fall. (At some point, a used vehicle ceases to be a logical economic alternative to a new vehicle.)
Mike Anderson
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