Low prices on vehicles may convince some potential car buyers to take steps toward purchasing a vehicle, as it may help them better afford other necessary expenses such as auto insurance policies. This may become more commonplace in the future, especially if prices continue to slip.
The price level for used vehicles that were not more than 8 years old dropped 3.5 percent in October compared to one month earlier, according to a report from the National Automobile Dealers Association Used Car Guide (NADA). The last time the figure fell this significantly was in October 2011.
When measured by the NADA vehicle price index, the level was 123.8, the report explained. This was one point lower than the previous month. Despite the monthly drop, it was still 0.5 percent improved from the same level in October 2012.
"Without the drama created by federal lawmakers that resulted in the shutdown, it's likely that October's rate of decline would have been directly in line with recent seasonal norms," said Jonathan Banks, executive automotive analyst for the NADA Used Car Guide.
Despite this, the slide may be a normal, seasonal trend throughout the end of the year. The report explained that prices will likely drop by 1.9 percent during both November and December. This would be more than what occurred last year, even though that was due to the aftermath of Hurricane Sandy. This would still be close to the 1.5 percent drop that happened during the final part of 2011.
New vehicle prices continue rise in October
Even with the used car price level sliding, there are positives in the new car market. A report from Kelley Blue Book noted that the average price for a vehicle was $32,184 during October, which was 1.2 percent higher than in September. However, it was little changed from the same point one year earlier.
"Achieving pre-recession profitability levels, Chrysler has seen an increase in U.S. sales of the Ram pickup and Jeep Grand Cherokee as demand continues to rise," said Karl Brauer, senior analyst for Kelley Blue Book. "Despite slightly weakened transaction prices from the month prior, Chrysler is still experiencing an overall increase in prices from this time last year."
Whatever manufacturer a person decides to look at as a viable option, it may be a good idea to compare multiple cheap car insurance quotes online to help make the purchase economical in the long run.