FORT WAYNE, Ind. (WANE) — New year, same sky-high used car prices.
The average price of a used vehicle in the United States in November, which is the most recent available data, was $29,011— 39% more than just a year ago, according to Edmonds.com.
“It’s the same thing that’s going on with cottage cheese and houses and everything right now. I mean, it’s inflation and we’ve seen it in the car market,” said Jay Leonard, the owner of Preferred Automotive Group. “When you’ve got new cars that are not being built, and the only thing out there are used cars, the price is going to go up.”
These soaring prices are causing the cost of used cars to edge closer to what it would be to buy a new one. Since the pandemic started, used vehicle prices have jumped 42%— more than double the increase for new ones. Last month, the average used vehicle price was 63% of the average new vehicle cost. Before the pandemic, it was 54%.
To show how high the prices have skyrocketed, Leonard gave the example of a woman that bought a used Chevrolet Impala LTZ for $23,000 two and half years ago. The woman traded the same car in last week and the dealership gave her $20,000, which is only a $3,000 loss.
“Normally, you drive it off the lot and you lose $3,000,” said Leonard. “So, you know the cars are are worth a lot of money right now.”
He also said in some instances, used car prices are exceeding new car prices.
However, according to Leonard, there may be light at the end of the tunnel.
“We haven’t seen a huge increase [in prices] in the last 60 days and I don’t foresee them going up anymore,” said Leonard. “We’re seeing more new cars coming onto the lots which is helping us in the used car industry. We’re seeing a lot more cars coming off lease now. So that’s helping us with pricing.”
He said his best guess is that prices stay steadily as high as they currently are for another year, without increasing. This will continue until the supply and demand changes, and new cars can be built faster.
“I think the biggest thing that people have to understand is that we’ve gone through the worst,” said Leonard. “I can’t tell you what’s going to happen in February or March, but the cars are starting to loosen up and I think that that hopefully, by this time next year, this will all be in the past.”