If you’re looking to buy a used car, we’ve got good news for you – the market is stronger now than it’s ever been! Throughout the US and Canada, demand for high-quality used cars is higher than ever, and demand for new cars is leveling off significantly.
This is great news for used car buyers! Higher demand ensures a better supply of high-quality used vehicles, and that means that you can get yourself a fantastic used car – for less.
But why are used cars in such high demand? There are a variety of factors that have combined to create this increase in demand. Let’s take a look at them now!
1. Leasing Is More Common Than Ever
In 2009, only about 7% of new vehicles were leased – an all-time low. This is likely due to the financial crash of 2007-2008 – but in recent years, Canadians have been leasing cars at much higher rates. In 2014, about 20% of all new vehicle purchases in Canada were leased, and leasing rates have been growing ever since.
This means that there are a large number of used cars that are being returned to dealers in great condition. These vehicles are highly sought-after, as they’re usually in good shape, but have already undergone depreciation – making them a very smart investment.
And because more Canadians than ever are leasing, there’s been an influx of these vehicles, which has increased their demand on the market.
2. More Demand For Certified Pre-Owned Cars
Certified Pre-Owned (CPO) vehicles are used cars that have been certified to be in good shape by the manufacturer, usually through a comprehensive set of vehicle tests.
CPO vehicles are surging in popularity, because CPO cars are usually backed by comprehensive manufacturer warranties, and have been certified to be of a particular level of quality by an individual automaker.
Combined, CPO vehicles and previously-leased cars make up the most quickly growing segment of the used car market, and are driving the growth of the entire market segment.
3. Higher Costs, Longer Loans For New Cars
Over the years, the cost of new cars has been skyrocketing. According to Experian, the average car loan has risen to an all-time high of around $30,000 USD, or $40,000 CAD, and the average loan term for a new car has risen accordingly, peaking at 68 months.
These high costs and long loan terms have turned many Canadians away from buying a new car. Having a brand-new vehicle is nice – but the enormous cost means that the typical family is unable to afford a new car.
So rather than investing in an expensive, long-term car loan, Canadians and Americans have begun turning to used cars. And while used car prices have been rising due to increased demand, the average cost is still around 33% lower than the cost of a brand-new vehicle – making a used car a very economical choice.
4. Modern Cars Last Longer
Modern designs, cutting-edge materials, and better vehicle performance have combined to make today’s fleet of cars more long-lived than ever.
Today, the average age of a modern car is at an all-time high of 11.4 years. For comparison, the average age of a car in 1995 was 8 years, and in 1969, the average age of a vehicle on the road was only 5.1 years.
Unlike cars of the past, which often suffered from corrosion issues, mechanical failures, and other issues after only 100,000 miles, modern vehicles can easily be expected to last up to 15+ years or 200,000 miles with proper maintenance and upkeep.
Because of this, consumers are more willing to purchase vehicles that have been owned for a significant amount of time, as long as they’re certain that the vehicle is in good shape. This new behavior has increased the overall size of the used car market, and made it easier for dealers to sell older vehicles.
Need A Used Car In Winnipeg? Come To Ride Time Now!
The used car market is stronger than ever – and that means that this is the perfect time to get a car from Ride Time!
Based in Winnipeg, Ride Time offers a huge variety of high-quality used and pre-owned trucks, SUVs, and cars. At our dealership, you’ll find fantastic deals on the best used cars in all of Canada – that’s a guarantee.
So if you’re interested in a new car, come into Ride Time today, or visit us online – we can deliver our stock of high-quality used vehicles to you, no matter where you are in Canada!
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