Are you among the 75 million Americans between the age of 18 and 30, commonly called Generation Y? Well, a survey claims Gen Y is more likely to buy a used car than a new vehicle. That fact alone could drive used car prices higher while putting pressure on manufacturers to lower new car prices on entry-level models.
According to a survey, approximately 63 percent of Gen Y respondents believe used cars are a greater value than new cars and they're more than three times as likely to purchase used cars over new. "Generation Y is typically a group that thinks 'newer is better,' but as the economy is slow to recover and jobs are hard to find, this generation may help reshape the car buying process," said Michelle Collins, vice chairman and U.S. automotive sector leader, Deloitte.
So, more young people are going to be shopping for used cars. As less new cars are sold, the demand for used cars increases and prices rise. However, manufacturers want to sell new vehicles, so entry-level prices are probably going to drop. That could increase the demand for new cars, which means more used cars on the market and lower prices. See how confusing all this is?
And, speaking of confusing, the survey shows Gen Y buyers are considering buying SUVs but are also concerned about a vehicle's impact on the environment. Seems like a bit of a disconnect, doesn't it? Maybe that's because I was among the last years of the baby boomer generation.
OOYYO's comment: It's like trying to predict the stock market, Hopefully the prices of new cars will drop thus forcing the price of used cars down.
