Reply to Will used car prices drop at dealerships?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]Admittedly, it's more difficult to know whether you're getting a good deal or not when used car shopping.  Having said that, I've been casually looking at certain used models for several months and haven't seen any price drops (at least in terms of what they are posting).  Do you assume there is more flexibility there also, understanding the margins may be smaller than what could be gotten with a new car purchase?[/quote]

I expect them to go up because so many people are unable to pay for a new car, unless it is tiny.[/quote]

I think used car prices will come down somewhat. I agree with that people will prefer used versus new, however, there was already a high demand (used + new) prior to CV19. Demand will definitely shift from new to used (substitution effect), but the overall demand for cars will decrease also. Given the magnitude of this issue and impacts on the economy, I think the overall impact on car sales will be much larger than the new-to-used substitution effect thus decreased price for used cars. Car with higher price tags and generally more fun but less practical cars (e.g. 2 seaters) may experience bigger declines in price.[/quote]

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