Car trade-in values up, spell better buying power for car shoppers
TWIN FALLS, ID (KMVT) A nationwide shortage of cars means that now your used vehicle is worth more than it used to be. The Cash for Clunkers program managed to get plenty of the older gas guzzlers off the road. But car manufacturers have been making a lot less cars in the last three years, as well. What that boils down to is there are less used cars these days, which means they're worth a lot more.
Car dealership owner Con Paulos says, "Since 2008, used car prices have climbed 20 percent now. So the first time in history that a depreciating asset has started to appreciate, at least in the auto business."
Paulos says that lots of car rental companies have also hanging onto their vehicles, and not retiring their fleets for the last three years. He says that car manufacturers are also trying to catch up after the disasters in Japan earlier this year. But in the meantime, consumers are also pinching pennies where the rubber meets the road.
Paulos says, "Tires will run longer than we have ever seen 'em run, and people are driving them until they 'get to the cords.' And they're not replacing tires or cars until they have to."
Paulos says that new car prices have also been falling. So with more incentives to buy new cars, along with a higher trade–in value for your used vehicle, plenty of drivers can get more car for their dollar. He says used car prices should drop back to normal by sometime this fall. But right now the economy has also bitten into car maintenance budgets, as well.
Dave Carlson, spokesman for AAA-Idaho, says, "Because many motorists simply can't afford to, they're parking their cars, or they're driving their cars as long as they can without having repairs done."