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Can the market value of your car go down irrespective of its condition?

August 17, 2017

Can the market value of your car go down irrespective of its condition?

In terms of economics, it is in the end all about demand and supply. A higher demand for used cars will give you a higher used car book value. But if more people are looking forward to selling their used cars, then you know it for a fact that price of used cars will go down.

If today people are purchasing more new cars, then there would be more used cars in the market. Which implies that tomorrow there would be a higher supply of used cars in the market. People who are looking to buy used cars would be happy to notice such high supply of used cars. Not just because of lower prices, but also because buyers would have a larger pool of choices to pick from.

Irrespective of the condition of your cars, its demand is expected to change the moment you alter either demand or supply for used cars in the market. Even if you have a well-maintained car, which is not used for a long time and promises high performance, you might not get equally good car book value if the government decided to lower the tax rates on new cars.

This is not only going to decrease demand for used cars because of higher demand for new cars, but it will also increase the total number of used cars in the market. Which implies that it is going to hit you hard as it is not only killing the demand for used cars today, but it is also going to soon boost the supply of used cars in the market.

On the contrary, any increase in the tax rates is going to make new cars much more expensive, and used cars much more attractive to buy. This again is good for car owners who are looking for buyers, but not for such buyers. Therefore, not just the demand and supply of used cars in the market will affect the cars’ book value, a list of related factors are going to alter the car book value substantially.

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