Monday, July 28, 2008

Econo-Cars Appreciate?

Lately, I have been reading alot of articles about how economy cars are actually appreciating in value. In all my 30 years of working in the auto industry I have never seen the value of a car actually appreciate with the exception of collector cars. Generally, when I purchase a car the key to making any profit along with any other Dealer is to sell it as fast as possible. Why? You might ask.

Well a vehicle is a depreciating asset and once you drive a new car off the lot you instantly lose 10-20% of it's initial value (This percentage varies depending on the Year, Make, Model and the kind of deal you got on the car). Used cars tend to lose there value slower, but they still depreciate. The more miles and wear and tear you put on your vehicle in the years after you purchase all play a huge role in the future resale value. This is why I was totally shocked to actually hear some cars have actually appreciated up to 20% of there value in the past 3 months. The cars that have made the biggest jump in value are economy cars that get great gas mileage.

I believe the reason for this unusual climb in appreciation is because the exhorbitantly high gas prices we have all been experiencing around the country. People are scrambling to buy up cheap vehicles that offer great gas mileage and trying to sell or trade in there gas guzzling trucks and SUV's. With oil prices finally dropping it will be interesting to see how long this appreciation for small cars last, but for now don't count on walking into your local Dealer and expecting him to give you a "GREAT DEAL" on a econo-bomb! Unless, of course you buy from FOX AUTO SALES, where our prices are always below our competitors, Private or Retail! OTIS