Used Car Prices Predicted to Increase Short Term

Last month, I wrote about how used car prices were expected to drop soon. But that was before Hurricane Sandy devasted the Northeast region and destroyed an estimated 250,000 vehicles.

Long time readers know the importance of supply and demand when it comes to car prices, so this large drop in supply is now expected to increase prices by up to 1.5% according to the National Auto dealers Association. Edmunds.com went even further and is predicting price inceases of $700 to $1,000 in the short term. However, KBB and AutoTrader.com say the impact may be overstated and predict there will only be a $200 to $300 increase, mainly in the Northeast region.

But most analyts claim the price increases won't be limited only to regions affected by the hurricane. Many used car dealers get their inventory from a network of wholesale auction houses where vehicles travel hundreds or even thousands of miles to meet demand. That could mean price increases will be felt by everyone.

If you have the luxury of waiting, my recommendation is to hold off purchasing a used car for a few months. Wait until late January or February of next year when the market will likely be more favorable. On the contrary, if you need to sell your used car, you should do it soon to maximize revenue.

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