In
the wake of late October's devastating hurricane, industry experts are now telling
us to prepare for another storm, albeit
one of a different variety. While as predicted, hurricane Sandy brought with it
rain, wind, floods and power outages, it also brought with it something that
was a little more unexpected – Rising used car prices.
The
reasons for this seems simple enough: As hurricane victims begin their search for
replacement cars, they will do so by turning to the local dealerships in the
Northeast, an area which accounts for almost twenty percent of all new and used
car sales in the United States. Unfortunately, those local dealerships were hit
just as hard, and their inventories are already at record lows.
So
what is going to happen when consumers come knocking and those dealers have only
limited options? Yep, you guessed it: prices are going to rise. In fact, in an interview with Auto Remarketing, Edmunds.com director of analysis Ray Zhou predicted that "Used vehicle prices
will increase $700 to $1,000 in the impacted area"
Unfortunately,
while the immediate impact will be on the Northeast, car buyers across the
country should begin to prepare for a rising price storm. Because those local
dealerships are going to cast a wide net to meet demand, pulling in cars from
all over the country, used car prices everywhere will be affected throughout
the upcoming months.
Prepare
yourself for the rising price storm.
The
question then becomes: If you are one of
the thousands of consumers in need of a car during the next several months, how
do you avoid paying those higher prices?
Well
I sought out the advice of the used car buying experts over at
UsedCars.com. As the prominent online used car search engine, they were able to
shed a little light on a few money saving tips:
·
Buy now: While this may seem like a contradiction in
terms, you should not wait for prices to go down – especially if you anticipate
needing a car within the next several months. Right now, the hurricane has
interrupted car sales in October and early November, and we have yet to see the
prices jump. This means that if you have
the opportunity to buy a car within the next week or two, it’s almost imperative
that you strike while the iron is hot.
·
Think Compact: The compact car industry was best
prepared for the increased demand. New and used inventories for compact cars
were in surplus before the storm, which means that there may be enough supply
to meet this demand.
·
Avoid Luxury: According to Edmunds.com, New York,
Philadelphia and D.C. account for 25% of all luxury cars sold in the United
States. This means that now may not be the best time to think about buying a
luxury car.
·
Shop Online: The dealerships in the Northeast are
turning to the internet to replace their inventories, and truthfully, there is
no reason you cannot do the same. Car
buying search engines have made it easy for car buyers to shop for deals all
over the county. You simply enter in the make or model you are interested in,
and the search site returns a list of dozens of cars that meet your criteria.
One final piece of
advice shared, is the potential for flood damaged cars infiltrating the
market. Car buyers over the next several months need to be on the lookout for
cars that were damaged during the massive flooding that accompanied the storm.