Tips for buying used cars right now: Prices falling, but challenges remain
BIRMINGHAM, Ala. (WBRC) - Used car prices are falling after setting record highs over the past year, but buying is still a challenge. We’re On Your Side looking into a few ways you can get in a used car and save money too.
If you were looking to sell your car over the past year or so, you could probably get a lot more for it as prices for used cars skyrocketed due to supply chain issues which slowed down new car production, among other factors.
“When you don’t have enough new cars in the pipeline to satisfy new car demand, people start to default to used cars and that drives up the price of used vehicles,” Karl Brauer, Executive Analyst with ISeeCars.com said.
Brauer says at one point, car values both new and used went up faster than people’s income. From 2019 to 2022, used car prices went up over $13,000 for a Toyota Avalon and over $12,000 for a Chevy Traverse, according to data from ISeeCars.
“You can’t keep having car prices go up. At some point, they get priced out of the average consumer’s budget and they just stop buying,” Brauer said.
As we enter the new year after these historic highs, prices for used cars are finally cooling off and becoming easier for you to get your hands on one.
“We’re seeing a little bit more inventory in the new car market with all the manufacturers getting on the lot and now we’re starting to see a little bit more of a rebound with some of that inventory coming back,” said Kevin Liles, General Manager at Edwards Chevrolet on Highway 280.
Even though prices are going down, they still remain higher than in years past. So what can you do to save money?
First off - do your homework.
“You really shouldn’t go to the dealership until you have a very solid understanding of which cars serve your needs and what the current market prices are on them,” Brauer said.
You should also look into getting a warranty.
“You’ll still pay less than a new car and you will have that peace of mind for long-term ownership if anything goes wrong, you can pay very little or nothing and have the car fixed,” Brauer said.
Also, check the history of the vehicle, which should include accidents as well as service visits. The history report shows you how the vehicle was maintained and the service history.
Brauer says you could also save money by expanding your search area.
“Geography does matter. If you are in a given market and you are looking for a specific vehicle type, maybe that type is very popular in your market and it’s much more expensive than it would be 100, 200, 500 miles away,” Brauer said.
Consumer Reports says despite falling prices, buying a used car is still a challenge because of higher interest rates ramping up monthly payments. CR suggests buyers act quickly and negotiate from an informed perspective.
“As far as saving money in this market goes, looking for models that aren’t as sought after—like if you go to a dealership and find a new or used car that has waiting list or everybody is looking at the same car, you’re going to find a better deal for the cars that people aren’t looking at,” Benjamin Preston with Consumer Reports said.
Consumer Reports says you should also consider buying a new car. They say if you borrow money to buy the car, it may be better to find a new car that can qualify you for a lower interest rate, plus you’ll get the added benefit of a fresh factory warranty.
You can read more about used car buying tips by clicking here.
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