- March 14, 2023
There’s no denying that owning a car adds convenience to your daily life. Gone are the days when you have to wait in line at the bus or train station just to get to your destination. It also helps you save more money than having to hail a cab every time.
With that said, you may be thinking of getting a car of your own. With many car dealers around your area, we understand how tempting it can be.
The same is true if you’re planning to replace your old car. But instead of allowing your old one to rust away in the driveway, why not sell it later? With the value of used cars on the rise, you’ll certainly get a great deal out of it.
How is it possible, you ask? Why would someone pay more for a used car? Well, you came to the right place. Here, we will discuss reasons why the value of used cars go up over time.
Like what we have previously mentioned, owning a car brings you great convenience. Aside from saving you the time from having to line up every morning, it also saves you more money on having to pay for a cab ride. You can also use it at any time of the day, making it extra useful during emergencies.
With that said, more and more people are beginning to realize how important this machine is to our day-to-day lives. And that’s why we have seen an increase in the demand for used cars. In recent years, millions of used cars are sold annually – and the demand doesn't seem to fizzle out soon. With the more affordable cost of these used cars, low to middle-income earners are more inclined to buy used cars than new ones.
Also, it seems that used cars are becoming more popular among young professionals and university students. Thus, this demand is not going down anytime soon.
Aside from the rise in the demand for old cars, we are also seeing a lack of supply. By this basic principle of economics, prices are bound to rise if there’s an insufficiency of supply vis-à-vis a growing demand.
In this case, we are not simply talking about the supply of old cars, but of all cars in general. Because of what we have been through in recent years, automobile manufacturers have decided to close down some of their plants to keep up with the economy. As such, we have seen a decline in the number of new cars produced.
The same is true for used cars. Considering the convenience that these automobiles and the lack of new ones to replace them with, car owners are holding on to their used vehicles. It will be of great help during this time of struggle, so it’s best to hold on to your car if you currently own one.
With these reasons in mind, and with the fact that the situation won’t improve anytime soon, we do not see an increase in supply in the coming years.
Economically speaking, brand new cars are very expensive. While it’s tempting to buy a new car to replace your old one, it’s not the practical thing to do at this point.
Even before manufacturers decided to shut down some of their plants, used cars were already sold at a fraction of the cost of brand-new ones. But now that plants and showrooms are closing, getting a car from point A to point B has become more expensive. And that can also add up to the final costs.
Also, shipping in parts and chips needed for new cars has been more difficult. At times, these parts may have to be ordered from abroad, making the delivery process more expensive and time-consuming. And again, this also adds up to the final cost of the vehicle. For these reasons, it’s easy to see why brand-new cars are more expensive today than in yesteryears.
The next reason why the value o used cars go up is something that we experience almost yearly. And that is inflation.
Inflation is an economic concept that refers to the decline in a currency’s purchasing power over the years. It not only affects the price of used cars but the price of goods in general. That's why, if you have observed, your favorite box of cereals may have been cheaper when you were younger than it is now. That’s inflation.
Experts reveal that the price of used cars seems to grow at a rate of 1% every year due to inflation. And since there are no signs of prices deflating any time soon, then we are expecting it to rise higher over time.
Aside from the economic aspect of it all, there are some simple reasons why the value of used cars go up over the years. This includes upgrades that the former owner has introduced.
There are times when car owners seem to grow tired of the old ones they have. But instead of buying a new one, they find it impractical, since their current vehicle is still in great shape. Instead, they would opt to introduce upgrades. Upgrades such as comfortable leather seats, digital d
Upgrades such as comfortable leather seats, digital dashboards, and compartments for added storage are among the most popular upgrades we’ve seen. Some even introduce better and more cost-effective engines. Thus, it's easy to see why the value of these old cars is on the rise.
In some cases, owners take extra care of their vehicles. That helps an old and used vehicle to stay in great shape over the decades. And in these rare situations, the car becomes a vintage collectible.
When taken to the right buyer, the prices of these kinds of vehicles will surely soar. Since it’s rare to find a well-maintained vintage car, expect a collector to be willing to pay for it at far more than its original price.
With all these reasons in mind, it’s easy to see why the value of used cars go up. And considering the economic conditions that we are in at the moment, it won’t seem to change anytime soon. So if you have an extra old car rusting in the driveway, why not sell it for an extra income? You're getting a good value out of it.