With inflation cutting into household budgets and soaring interest rates causing untold stress to mortgage holders, it’s good to be able to report a little bit of good economic news for a change.
Well at least it’s good news if you’re in the market for a used car, because after many months of soaring prices, there’s evidence that those sky-high used car prices are now coming down.
So, what was behind those soaring prices that saw some used vehicles being sold at prices that were higher than the price of the equivalent new vehicle?
Well, you can blame COVID for that. When the pandemic hit, carmakers cut back on production and reduced their demand for the semi-conductor chips that are vital to the function of modern cars, which are increasingly computers on wheels.
However, demand for electrical goods remained strong, which saw their manufacturers scrambling to get their hands on as many chips as they could.
It was a major miscalculation on the part of carmakers because despite the predictions, demand for cars remained strong, which left the world’s carmakers high and dry and struggling to meet demand without the necessary components to make them.
Waiting times for all sorts of new cars blew out to months, which saw people who needed a new vehicle turn to used cars that met their needs.
With limited supplies of used vehicles, prices soared, hitting their peak in May 2022 according to the The Datium Insights-Moody’s Analytics Used-Vehicle Price Index.
But since then the production of new vehicles has increased and supply has improved with the increasing availability of semiconductors, reducing the demand for used vehicles.
And there are other forces at work too. Moody’s Analytics believes those prices will keep heading south throughout the year as a result of weaker demand because those interest rates are pushing up the cost of borrowing while inflation keeps putting the squeeze on household budgets.
So, if you’ve been in the market for a late model used vehicle, you can start to breathe a little easier as we head further into 2023. Those prices are no longer going up. And if you are looking towards a used car then the clever way to get behind the wheel of the vehicle of your choice is with a Fleetcare Novated Lease.
Perhaps you didn’t know you could get a novated lease on a used car? Well you can, though there are some rules you’ll have to follow.
For starters, the vehicle will have to be less than seven years old at the end of the lease, but any vehicle you’re thinking of leasing will have to be assessed on a case-by-case basis.
Your boss may also have certain restrictions on the vehicles available to their employees, so you’ll have to check with them first.
It’s always a good idea to check with Fleetcare about the vehicle you’re considering. We’ll be happy to answer all your questions.
But if you’ve got permanency at work and the boss agrees to it, then you’ll find that Fleetcare’s 30-plus years of experience makes getting that novated lease very straightforward and hassle-free.
You can rely on us to do all that paperwork for you.
Once you’ve done that you’ll find that a Fleetcare Novated Lease makes so much sense, with all the expenses of running that vehicle - that’s licensing, insurance, servicing, fuel, and everything else - all bundled-up into the one tax-saving payment. Plus, you’ll continue to enjoy the benefits of discounted fuel, repairs, maintenance and tyres on your vehicle.
To find out more about the many benefits of a Fleetcare Novated Lease call Fleetcare today on 134 333.