If you’re in the market for a used car, be prepared for massive sticker shock! Why? Because today’s used cars often cost three times what they would’ve just a couple of years ago. For example: A 12-year-old Jeep with 90,000 miles on it used to sell for about $4,500. Today, that same car would cost $10,000 more, and experts expect used car prices to rise another 30 percent by the end of the year. Why? Several reasons:
- First: The weak economy. Money trouble has forced many people who used to buy new cars to snap up “pre-owned” vehicles. Since new car sales and leases dropped 36 percent during the recession, fewer cars are being traded in. Also, rental car companies – which usually sell their cars after 2 or 3 years - reduced their fleets by one-third, eliminating another 1 million cars a year from the used car market.
- Another reason used cars are more expensive: High gas prices. People buying used cars want the latest, most fuel-efficient models. With so many buyers clamoring for the same cars, dealers can charge premium prices. In fact, many cars are selling for 25 percent above the top Kelley Blue Book price – which used to be reserved for vehicles in tiptop, almost-new condition.
- The final reason prices are skyrocketing on used car lots: The earthquake, tsunami, and nuclear disaster in Japan. It devastated production of Toyotas, Hondas, Nissans and Mazdas, and even shut down some plants. Right now, dealers around the world are running out of new cars, especially those with the best gas mileage. In fact, Mazda dealers can’t even order new cars for at least a couple more months.