Buying a used or pre-owned car has been made easier over the few years, with dealerships embracing the trend and ensuring customers that their pre-owned vehicles will run as beautifully as brand their brand new counterparts. For 2015, the appeal of a used car is only going to increase. According to used-car evaluation service Black Book, a partner of Cars.com, the increase in new car production is going to lead to faster vehicle depreciation in 2015.
The lower the depreciation rate, the more expensive a vehicle is. That means, a vehicle that was worth less in previous markets was worth more in the post recession American market. That trend is reversing, meaning cheaper used cars for buyers; great news for car buyers, bad for car sellers.
The reason for the rise in depreciation, and lowering of used cars prices is quite simple: according to Black Book, the depreciation rates are reverting to their normal rates before the 2008 recession hit. Anybody who bought a used car in 2008 knows how expensive it was, as the depreciation rate was just 7.7 percent in 2011. However, Black Books has used the previous years as guidelines to speculate on the depreciation rate in 2015. In 2014, the rate was 12.1 percent, while the 2015 used models are predicted to have a depreciation rating of 14.5 percent.
Black Books has predicted that for 2015 smaller vehicles will continue to depreciate, while subcompact and compact vehicles will see a boom in production as the US government adjusts the fuel-economy requirements, and because gas prices are continuing to lower. In addition, Black Books predicts that the production of new cars will be up, speculating that nearly 17 million vehicles will be produced, which will lead to used car depreciation due to the number of vehicles on the road.
Black Books suggests that customers also take into account annual trends when it comes to buying the vehicle of your dreams. At the end of 2014, as gas prices lowered and demand decreased, the depreciation value of compact and entry-level vehicles depreciated by quite a bit. So in 2015, consider buying a used compact or entry-level vehicle later in the year, as you will most likely get a great deal. However, if you are selling, do it sooner rather than later to avoid this end of the year plunge. Ultimately, 2015 will be a great year for used vehicle buyers, but not so great for sellers or traders.
Sourece: FIAT USA West Palm Beach