Supply and Demand (Buying a Car)

Topics: Automobile, Economics, Supply and demand Pages: 3 (1112 words) Published: June 15, 2012
Supply and Demand (buying a car)

There are a lot of things to consider when buying a car. There are short term and long term things that can cause problems with your decision. It is always a great idea to take time to decide what is best for you to do, when it is best for you to buy, what car you want to buy, and also if you can afford the car that you want to buy. I purchased a car a few years back and I had to determine all of these things. I had to get insurance quotes, an estimate on my car payment, factor in my bills at home, and my monthly house payment; not to mention food and other things like that. All in all I had a lot to decide.

There are many things that can cause a possible change in supply and demand when buying a car. Two main factors I see are the national and your personal income and also gas prices. Gas prices to me may not keep you from buying a car, but it may affect the type of car you buy. If gas prices in your area are generally high, you would not want to go out and buy a SUV. You would want to buy a smaller car that is good on gas or you could wait until the price of gas becomes stable and remains low. Also, the national income is a factor. When it falls so does the demand for vehicles, but as it rises as well does the demand for vehicles. Lastly, your personal income plays a role in it as well. You can only get what you can afford, so if most people are having a smaller income then the smaller lower model cars will be in demand, but if most people are having bigger incomes or have saved to get what they want then bigger cars will be in demand.

There are many substitutions that you can have for buying a car. You could prefer to buy a bicycle. You will save a lot of money, but you probably won’t be able to do as much. Meaning, you won’t be able to go as many places. Things like family vacations can’t be taken on a bike amongst other things. It might be easy for small commutes like maybe to work or for exercising, but in the...
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