Industry experts are always trying to predict how hot or cold things will be in any given year. After a long streak of record-setting numbers, everyone is keeping a keen eye on used car sales figures to try to determine when things will begin to slow down.
In the Beginning…
In January of 2017, experts were asked how the used car market would fare over the coming year; expectations were high. The prediction was that things would keep going well and 2017 would be another all-time great year following the record-setting 2016.
So, How’d They Do?
Now that we are rounding the corner on 2017, we have more data to analyze to see if these predictions are holding true.
For the first quarter in 2016, there were 10,322,933 used cars sold. In contrast, there were 10,187,724 used cars sold during the first quarter in 2017. To start the year off, this is a decrease of 135,209 cars sold. While this is technically a slowdown, it’s still a question of whether or not this represents a downturn from last year.
2017 may not beat 2016 in terms of the number of used cars sold, but so far it is no slouch. Over 10 million cars sold in three months is nothing to scoff at, and it seems that the experts’ predictions were pretty accurate for the first quarter. As we move along through the year, more data will arise and we can do further year-on-year comparisons to see where the trend is headed.
In the second and third quarter, 2017 could make a run at 2016 and make things more interesting. Being neck-and-neck with such a record-breaking year is enough to say that the used car industry is still doing quite well—as predicted.
Why Do Experts Make Predictions?
People often turn to experts to try to predict what will happen in the coming months. Experts take into account everything they can to make their predictions: the overall state of the world, global economies, local economies, it’s all considered. Their predictions can help everyone plan what to do during the upcoming year, from car manufacturers to dealerships to consumers.
Factors That Impact the Used Car Industry
The Flow of “New” Used Cars: In recent years, the high number of slightly used cars coming out of leases has fueled an increase in used car sales, leading to these record numbers. This trend is likely to continue for the remainder of this year and into the next. From there, it will be interesting to see if demand can keep up with supply.
Interest Rates: As long as interest rates remain favorable for consumers, the high number of used car sales should continue. More and more consumers are looking to used cars for their depreciated value, resulting in a great deal for the new driver.
What Happens When Predictions Are Wrong?
Few choose to base their decisions entirely on possible future outcomes; these predictions are typically meant to be used as loose guidelines. Luckily, nothing happens if reality does not match the predictions made by experts. If the predictions are wrong in a good way, then things keep going great. If the predictions are wrong in a bad way, things simply are what they are.
What Happens When Predictions Are Right?
When experts get predictions right, it helps to make even more accurate predictions for the next quarter or fiscal year. If the data you were using led you to make an accurate prediction, you can use the same kind of data to make further predictions as the real numbers come in throughout the year.
However, as you can see, you should always take predictions with a grain of salt. The real, recorded data is what you really want to analyze to have the clearest idea of where things are headed in the future.
How We Can Help
At Ride Time, we can help you decide whether or not now is the right time to buy a used car. We study up on the used car industry every day so that you don’t have to. Stop in today for a chat about how things are going in the used car market in Canada and beyond.