Buying a used car offers several advantages over buying new, most of which have to do with price. In fact, many drivers are finding that hanging onto an older car and fixing it up is a more affordable option than purchasing a brand new one.
According to the Detroit Free Press, the auto parts industry is booming as drivers looking to cut costs are opting to repair their used vehicles rather than head over to the dealership and put down the money for a new car. Stock shares for the major auto companies, including Advance Auto Parts, Auto Zone and O'Reilly Automotive are all at or near 52-week highs.
"People who are not buying new cars are hanging on to their old cars and repairing them," Michael Odell, CEO of the Pep Boys chain, told the news source. Pep Boys has over 600 shops nationwide, but is taking advantage of the good business by adding 35 additional stores.
The surge in people hanging on to older vehicles is due to a number of factors, one of which is simply sheer numbers. Colin McGranahan of Bernstein Research speculated that in the early part of the decade, the industry was selling more than 16 million cars per year. In the recession-crippled era, that number is down to about 10 million cars per year. Simply put, there are more used cars available than new ones.
The current economic situation is contributing to other factors affecting the surge in business. Drivers still aren't keen on making a new vehicle purchase, and they may have even seen the dealership where they originally bought the vehicle close down. That means they're most likely taking the car to an independent mechanic, who relies on an auto part supply chain. McGranahan also said that others might be performing maintenance and repairs themselves in order to save money, which is also driving parts sales.
In addition, technology has advanced to the point that cars are lasting longer than they ever have before.
"People have realized their cars will last longer than five years," Judd Nystrom, senior vice president of Advance Auto Parts, told the news source.
Drivers might want to take advantage of longer-lasting vehicles by making their next purchase at a used car dealership. If a potential buyer is worried about maintenance, they may want to look into the certified pre-owned programs that most major brands maintain. These plans allow drivers to purchase a used car with a limited warranty backed by the manufacturer.