Local used car dealers are facing a shortage of inventory and rising costs as the demand for used vehicles increases.
Tim Anastopoulos, owner of Anastos Motors, said scarcity and demand drive up prices, making it much more difficult for people on a tight budget to get a quality used vehicle.
“Prices are quite high right now for used vehicles – demand is driving up prices – because there are no new cars on the market,” Anastopoulos said. “Manufacturers are struggling to release new cars, which dramatically increases the demand for used cars. “
Anastopoulos said its dealership, 4513 Green Bay Road, would normally have around 110 vehicles on site. They only had 60 last Wednesday. The dealership specializes in two and three year low mileage vehicles. They are 30-35% more expensive than about a year ago.
“The price of a two or three year old car is high,” he said. “The older cars that exist are problem cars with high kilometers and we will not sell here. We’ve been here for 30 years and when we get these cars they are in dire need of a refurbishment.
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Anastopoulos said he even accepted exchanges from customers, some of whom are doing better than ever with their car purchases.
“I’ve taken trades from customers I’ve sold cars to, and I’m giving them more money than they paid two years ago,” he said. “In 30 years of my career in the automotive industry, I have never seen anything like it. “
No additional income for the dealer
Matt Lindstrom, owner of Car Corral, 6000 49th St., expressed similar sentiments.
“There has been an increase in demand for certain vehicles like SUVs and pickup trucks, and the value of those has definitely increased,” he said. “You can’t buy new cars, and the demand for trucks is still there, which has always been a hot trend. “
Lindstrom said it has vehicles for sale, but the costs associated with purchasing new vehicles have increased by about 30%.
“In the used car market, on the wholesale side, things easily go up to 30%,” he said. “It doesn’t help us at all. We pay so much more for vehicles. We’re not making a profit margin anymore or anything like that. We buy them on the wholesale market and then resell them for resale after repackaging them.
“It’s not like we’re making more money with them. It makes it more difficult because you have to explain to customers why we charge more for them.
Lindstrom said the market “shows no signs of easing” anytime soon.
Scott Dooley, part owner of Carbox, 1750 22nd Ave., said he’s committed to helping as many people as possible buy a used vehicle.
Dooley said he buys a lot of vehicles on the street. He said he would even cross state borders to buy a vehicle.
“Anything we can find that is quality and super affordable, that’s what we’ll do,” he said. “Everyone is raising their prices and we are keeping ours the same. Other dealerships have been interested in purchasing our cars, which is a crazy thing. I never thought that would happen. We sell half of our cars to other dealers because they don’t have any. It’s a good deal for us.
Prices are rising nationwide
The average price for a used vehicle in November, according to online car shopping site Edmunds.com, was $ 29,011, about 39% higher than a year earlier.
The blame can be blamed directly on the outbreak of the pandemic in March 2020. Auto factories have suspended production in an attempt to slow the spread of COVID-19. As new vehicle sales declined, fewer people traded in used cars and trucks. At the same time, demand for laptops and monitors from people trapped at home has led semiconductor manufacturers to shift production from automobiles, which rely on these chips, to large electronics. public.
“The demand on any car was low, so they cut back on their supplies and went to the chipmakers and said ‘we don’t need them anymore,'” Anastopoulos said. “When the market came back, (chipmakers) focused on making chips for electronics.”
When a faster-than-expected economic rebound boosted demand for vehicles, auto factories attempted to restore full production. However, chipmakers couldn’t react quickly enough. On top of that, car rental companies and other fleet buyers, unable to acquire new vehicles, have stopped offloading old ones, exacerbating the shortage of used vehicles.
As bleak as the market for used car buyers is, the shortage of computer chips has also pushed up the prices of new vehicles. The average new vehicle, according to Edmunds.com, is close to $ 46,000.
Even so, the prices of used cars are expected to approach those of new cars. Since the pandemic began in early 2020, used vehicle prices have jumped 42%, more than double the increase for new vehicles. Last month, the average price of used vehicles was 63% of the average cost of new vehicles. Before the pandemic, it was 54%.
The Associated Press contributed to this report
Today in History: January 11
1908: The Grand Canyon
1935: Amélie Earhart
1963: The Beatles
1964: Luther Terry
1989: Ronald Reagan
2010: Mark McGwire
2012: Joran van der Sloot
2017: Donald Trump
2021: Pope Francis
2021: Sheldon Adelson
The Associated Press contributed to this report.