More Buyers for the Cheapest Cars
Posted on April 22, 2008 in Business and Finance, Entertainment by Shewli
The overall vehicle sales have fallen while the small car segment shows an increase in sale. The demand for small car remains because small cars are lightweight and maximize fuel efficiency. Besides small cars cost less by keeping the other costs like insurance premiums, tax, financing costs etc. low enough to endear the customer.
Although the ownership cost of small cheap cars in 5 years could go beyond 30,000 dollars still it remains the choice of the customers because the smallest and most fuel-efficient luxury car with all its other features drive the overall cost beyond a consumer’s budget.
If the initial cost of a car is a bit more than what the buyer is ready to pay no matter what the car’s depreciation rate is, the sale of such cars will not go up. The buyer does not think much what would happen in the long run. The initial cost should be affordable and the cheapest cars have high depreciation that is low resale value. Besides, the resale value of a car depends on the company’s reputation.
The resale value of cars produced by certain companies remains high because these companies choose to give quality precedence over quantity and sales incentives. These cars are deigned to run for a longer period and do not require replacement within a short span of time. These cars are demand-based and do not flood the market at any point of time.
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