The end of the year is a notoriously slow period for used car sales, with most shoppers choosing to focus on holiday shopping and celebrations instead of procuring a new vehicle. By February and March, however, sales start to pick up as customers receive their income tax refunds. As a result, used car retailers around the United States are busy stocking up on inventory in anticipation of great deals and big crowds come tax season.
For the past several months, it has been possible to find used cars with excellent prices and values: for example, Kelly Blue Book reported that values for 1- to 3-year-old full-size pickups were 3.3% higher in November 2014 than in November 2013, and 6.2% higher than in November 2012. Meanwhile, full-size truck values dropped by 0.9% from October to November 2014. And this trend doesn’t seem to be slowing: studies show that the values of used cars at auction in November declined by an average of 1%, or $236, compared to the average of 2.2% decline, worth about $449, that the industry saw over the past three months.
Used car retailers are taking advantage of these factors by stocking up on vehicles for the upcoming months. At least one dealership in Florida has reported that they have 100 cars, as opposed to the 70 to 80 vehicles they usually keep on the lot. By January, they hope to have 120.
Because of the low prices and steady values, many experts are recommending that potential used car buyers start car shopping as soon as possible after the holiday rush, as they might be able to get a better price. However, others in the industry have predicted that used car sales in 2015 will remain strong until June, especially in light of the IRS’s decision to tighten tax refund anticipation loans.
“We try to do this exact same thing, we make sure we have a stockpile of vehicles for the increased sales due to tax refunds,” says Jared Scott, Sales Manager at Vito’s Auto Sales and Rentals. “Usually the first half of January is pretty slow and it picks up until the summer.”
Used car dealers say they expect to see strong demand for all vehicle types, but that pickup trucks will likely see the highest demand. Similarly, cars with strong gas mileage are expected to be a favorite, in spite of low gas prices. However, whatever a customer may be looking for, it is recommended that they hurry: prices are expected to rise with demand.