At AAMCO, we know you need your car to get you where you want to go. Which is why if you are in need of an expert Automotive Mechanic, especially for Transmission Repair, we suggest you seek out an AAMCO Location nearest you and schedule an appointment so we can keep you happy and safe while on the road.
New Trend Emerging For Car Sales in Colorado
There is a new trend arising for both new and used car sales in Colorado, one which manufacturers and salesmen alike need to be aware of. The Colorado Automobile Dealers Association recently stated that in 2012, there was a 10% increase from the year prior for new car sales. In the same time, there has been a 9% decline in sales for used cars. The problem is more people are looking to buy used cars, the issue is that there simply isn’t enough supply to go around to meet the demand. Yet that is…
An Increase in New Car Sales
For the past decade, new car sales numbers have appeared rather bleak, not exactly meeting what car manufacturers would hope. But in 2012, at least in Colorado, new car sales have actually risen, and with gusto. From 2011 to 2012, there has been a 22% increase in new vehicle registration. This is a relatively high number, especially when compared to the very slow years prior, and it is expected to rise even further in 2013. But there are a handful of reasons that could be attributed to this sudden increase in new car sales.
The first reason that pops up is that for a while now the economy has been reeling, and is still uncertain for most. Unemployment and underemployment is still a real and major concern for many. However, those who had put off buying a new car may have finally felt like they’ve waited long enough. So this sudden surge of new car purchases could partly be attributed to the fact that many people had wanted to purchase a new car, perhaps they had been wanting to for years, and are only just now feeling financially comfortable enough to do so.
There is also the growing concern over the cost of fuel, which with the slew of hybrid and electric vehicles being offered nowadays, there is finally a selection worth peoples attention. The idea of buying a new gas guzzling vehicle nowadays usually turns people off, especially if they already have a functioning gas guzzling vehicle which suits their purposes.
It used to be, back in the good old days, many people would purchase a new vehicle every 5 years. Many people believed you should do this to avoid the cost of having to repair and maintain an “older” vehicle. But new cars last a lot longer than they used to, and are much more dependable. This has caused people to hold onto their vehicles longer, reducing yet another need to buy new cars. This idea will certainly not change as we move forward either, so it’s important for salesmen and manufactures to be aware that in total, fewer cars will be purchased per person per lifetime. However, how this relates with a growing population is uncertain. But it is definitely known that people hold onto their vehicles for much longer than they had in the past. Where it was once 5 years being the mark to signify an “older” vehicle, that number has now risen to around 10 years. Essentially doubling the lifespan of a car for an owner.
Finally, it has become increasingly easier to receive financing to purchase a new vehicle. There are also great leasing terms being offered as well. These have all obviously been reduced and set up in a way to tempt and lure potential new car shoppers into actually buying rather than living with their old vehicle for another year. These new and/or uncertain customers have become a strong target market for the automotive industry, because quite frankly, they had to do something. Sales were looking poor, and that’s a trend that can’t last long for any business.
A Decrease in Used Car Sales
Now you would assume that if new car sales have been on the rise, that used car sales would probably increase as well. Considering that when someone buys a new car, they generally sell off their old one. However, statistics show that the used car market has dramatically tightened up in Colorado. For the first time in automotive history, the average cost of pre-owned vehicles is at an all time high.
In 2002, the average wholesale price of a used vehicle was around $11,100, while the average days supply of used cars was 80. Fast forward a decade and in 2012 the average wholesale price of a used vehicle had jumped to $14,500 with the average days supply being 45. So over 10 years, the average cost had increased by $3,400 or around 30%. Meanwhile with the average days supply had fallen by about 35 vehicles or around 43%. Essentially, there has been a drastic decrease in the number of used vehicles that are for sale. Couple that with an increase in demand, or even if the demand stayed the same, and the cost has for good reasons risen.
Beyond their being a lack of supply for the market, there are other attributes involved here which caused the increase in prices. Though supply, as economics has taught us, is most definitely a major factor. Another reason for fewer used vehicles are being sold is that the economy has been questionable at best. Car owners, being uncertain over the economy, decided to hold onto their vehicles for a bit longer. Waiting to see how exactly things would play out.
Finally, we have to take into consideration that the quality, dependability, and longevity of vehicles being made in recent years allows for us to use them for longer without much worry over costly repairs. It used to be a sort of rule of thumb where you would buy a new car every 5 years so as to avoid the associated cost of maintenance and repairs. Nowadays, its more common than not for people to own their vehicle for upwards of 10 years before thinking of buying a new vehicle. As such, the longer people keep their vehicles, the fewer used vehicles there are on the market for re-sale.
When all of this is added up, you quickly begin to see why both new car sales are on the rise, and why the cost of used vehicles has not only risen, but there are fewer of them around on the market. Manufacturers and salesmen alike need to keep these facts in mind as they move forward, as people are keeping their vehicles longer, are more concerned with fuel efficiency and dependability, and after the recent recession, more reluctant to make frivolous or poor purchasing decisions. This is indeed all very interesting, but with the waves of new technology coming out in the future, such as driver-less automobiles, there are no doubt many more hurdles to overcome.
AAMCO Colorado knows how hard Colorado weather can be on a vehicle, and if you are in need of a Greeley Transmission Repair, we highly recommend you find the nearest AAMCO Location and set up an appointment. Because those who know, know to go to AAMCO!