Are you ready for a used car bargain? Consider a smaller model or a hybrid; recent car news reports detailed a dramatic drop in prices for subcompact and similar sized cars. According to the latest trends report, an entry level sports model had a price reduction of about 2.1%, while subcompacts were down a whopping 2.8%. Minivans and compacts dropped in price as well with an overall 2% drop. Some individual models are showing drops of up to 12.5% over previous quarter costs, including hybrids; some used models are down as much as 10%.
What is behind this new pricing trend for smaller used cars?
While standard sized vehicles, SUVs, and trucks are actually increasing in price, buyers are choosing smaller models for a variety of reasons. Falling and steady gas prices made family vehicles and larger rides more attractive. Hybrids also do not sell as well when low gas prices are making news. Cars designed for fuel economy have been lingering on lots for longer periods of time, leading to naturally lower prices.
Lower prices on smaller used cars are directly related to the uptick in leasing seen in previous years. Most of the vehicles that have falling prices are known for fuel economy and anywhere from three to five years old. The surge in leasing small, subcompact, and hybrid vehicles peaked in the period between 2010 and 2012 and was directly related to the record high gasoline prices recorded those years.
Now that those leases have ended and gas prices are more stable, the used cars returned after their leasing period ended have now flooded the market, directly impacting resale prices. With the recent trends in mind, it is likely that the price of these vehicles will continue to stay low as more cars enter the secondhand market, making a small model an excellent value for buyers. The current low price trend reflects models that are from one to five years old and represents a wide array of makes and styles.
The rule of supply and demand applies to the used vehicle market, too. As so many fuel-efficient models reach the marketplace, prices naturally become softer. Conversely, leases for large trucks, SUVs and sports models that were not fuel efficient fell accordingly when gas prices increased. There are now fewer large trucks available for resale, resulting in static or even rising prices. The most recent used car pricing models reflect this continued trend, and it is likely that it will continue for at least the rest of the year and possibly longer.
The glut of small used cars and hybrids into an already crowded marketplace translates to great news for buyers. Consumers looking for a commuter model or a great value on a used vehicle will be able to find a surprising array of options thanks to the latest trends.