Price and Demand

Price and Demand

One factor that affects car pricing is supply and demand. When looking for a vehicle, it’s important to understand the supply and demand affect. Knowing the supply and demand affect can better assist you with negotiating a fair price for a vehicle that is right for you. To figure out what the supply and demand is for a vehicle you are interested in, you would need to know how many car dealerships have the particular vehicle on their lots in comparison to what is in their inventory.

If you are interested in a vehicle that so many other people own but not many are available, you would have to pay a high price for it. On the other hand, if you want a vehicle so many others have and many dealerships all over the country have the vehicle, you can better negotiate the price and most likely get it at lower cost. If you are interested in a vehicle that not many want, you can most likely get even a larger discount, regardless of how many are available on the car lot. Therefore, research such things as does supply meet the demand for that specific vehicle, because if so the price may not lower for some time. Also, is the vehicle uncommon to the point car dealers are unable to keep it in their inventory for a long time. Lastly, find out if dealers are agreeable to giving a steep discount to get rid of it.

When used car prices climb due to high demand and low supply, it leads to great deals on new cars, to the point that it makes a new car, of the same make and model, less expensive than a used. Demand and supply can cause an increase in prices of used cars while lowering the prices of new car prices. Used cars can be in low supply and high demand for a few reasons. One reason is when there are fewer vehicles coming off lease due to a decrease in the amount of people leasing and the availability of leased vehicles. Another reason is when used vehicles are deemed unworkable and removed them at an unusually high amount. Lastly is when the economy is not doing so well and therefore people tend to keep their cars much longer than when the economy is doing well. Most of the used vehicle supply depends on trade-ins for new vehicle purchases