Prices of Used Cars May Decrease this Year

If you are thinking about buying a second hand or used car in the next couple of months, then there is good news for your wallet. An opportunity to reduce the cost of your house hold budget must never be missed.

The USA Today reports that the second hand cars are likely to level off and probably decrease in 2010. According to an analysis conducted by National Automobile Dealers Association known as NADA, the sales of new vehicles are expected to rise by 15 % his year which could possibly result in an increase of the supply of used cars and the number of trade-ins.

Since the last two years, used car dealers had nearly 8 million fewer used vehicles including trucks which increased prices of used cars every month in 2009.

It is a simple economics, because there is an estimated additional 1.1 million used or second hand cars are added to the supply of used cars, the prices are likely to decrease. However, according to the chief economist of the NADA, Paul Taylor, it would take a lot of years before the supply will return to the period of 1998 – 2007 when there was an excessive supply of second hand cars.

From the period of 1980 – 2007, second hand cars were a source of profit for dealers. Although in 2008, when the prices of gas drastically increased to record highs, the dealers experienced an average net loss of around $5 per used vehicle.

As the automobile industry is struggling to stay alive and afloat, this decrease in prices of used cars would just be what they really need. Therefore, if the prices of used care will decrease, will this make you willing to trade or sell your car for an upgrade that you are currently using.