PHILADELPHIA (CBS) — When it comes to buying a vehicle, are you a used car person or a new car person? If you’re in looking to buy used, you could be in trouble.
As 3 On Your Side consumer reporter Jim Donovan finds, prices are going up as supply has gone down.
Since the economy tanked, more and more drivers have been holding onto their cars.
And that’s causing a dilemma for those in the market for a used car.
“The supply of used cars is really low right now. First because people are holding on to their used cars and not trading them in at the same rate,” said Jeannine Fallon with Edmunds.com.
She says other factors are at play too.
“Cash for clunkers took a lot of used cars out of the market,” said Fallon.
Rental companies typically replace their fleet every couple of years. But now, “Rental car companies aren’t buying as many cars as they used to, because they don’t have as much business as they used to, and bottom line is they’re not turning more cars into used cars out in the market place,” said Fallon.
Also a few years ago, lenders were taking on fewer car leases, which is another huge supplier to the used car market.
As a result, the cost of a 3 year-old used car has gone up 20 percent in the last two years.
And the supply problem for used cars will only get worse.
“If you have a used car that you are ready to trade in, this is a wonderful time to get top dollar. However if you are shopping for a used car, you are going to pay the price,” said Fallon.
In fact, you may actually want to consider a new car.
“Some of the new car prices are actually less expensive than the used when you take into account some of the incentives and special financing deals available,” said Fallon.
Knowing that many car buyers are considering used, automakers are emphasizing their certified pre-owned car sales programs. Those cars by the way sell for a higher price.
Reported By: Jim Donovan, CBS 3