Wednesday, 8 June 2011

Buying a car? Wait 'til next year!

SPAIN Buying a car before the end of 2011 is a bad idea. It doesn't matter if it's new or used, prices have shot up over the last few weeks and experts forecast the trend will continue until the end of the year. Unless it's an absolute necessity, it is better to wait until 2012, according to columnist Jennifer Waters. Although Waters writes for and about the USA, her advice is being taken up in Spain by those who know about these things. Here is why:
Why have car prices gone up? There are several factors that coincide: On one hand, the global is severely impacting the main manufacturers, who have watched their business volume plummet over the last three years thanks to a drop in demand. As a result, the market for used cars has risen to new heights.

That, of course, is precisely the reason for the upswing: a lack of available used cars. Supply and demand, in other words.

Problems for Japanese industry
Add this to the devastating effects the earthquake and tsunami had for the motor industry in Japan and you have another reason for an increase in car prices, this time of the new variety. Nature blew away a good part of the sleek, efficient Japanese car manufacturers supply not only of the vehicles themselves, but also of spare parts and add-ons
Paradoxically, this coincides with what until then had been hopeful signs of recovery in the industry - in the US at least, though we know that whatever happens there will eventually happen here. People are out looking at new cars to buy, but if they expect the kind of bargains available just a few months ago, they will be sadly disappointed.
The thing is, the experts had been warning about the current situation since March. Buyers, uncertain about the economy in general, hung back. "It's too late now," says one. And this, if there are any more alarms sounding off about the economy -which there probably will be- could also have an opposite effect on the car market, whereby buyers just stop buying hoping for better deals later on.
Aha! That's the idea: Hold back, there are better deals to come.

What about electric cars?
In Spain there is another way of facing the price rises thanks to the fact that the Government approved a series of subsidies for the purchase of new electric vehicles. If you opt for one of these environmentally sustainable and efficient machines, you can see prices reduced from anywhere between €2000 and €6000, the latter when buying a car that has an exclusively electric range of over 90Kms.

Then again, you can always wait 'til next year.

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