‘Not a great time to buy’: Used car prices skyrocket with low inventory

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FORT WAYNE, Ind. (WANE) — Throughout the country, used car prices are rising as dealerships continue to face a low inventory.

“Everything I bought last week is more expensive this week, and everything I bought three weeks ago was more expensive last week. It continues to go up,” said Jay Leonard, the owner of Preferred Automotive Group on Lima Road.

According to caranddriver.com, nationally, used car prices are currently up an average of 14 percent compared to the spring of 2020. This means the average price to purchase a used car is now nearly $24,000. The price of a pickup is up the most at a 27 percent increase.

Leonard said at Preferred Automotive Group, the price of used cars are up 20 percent.

For example, Leonard said a 2018 Chevy Equinox would sell at his dealership for $21,000 last year. Today, that same car would sell for between $25,000 and $26,000.

According to Leonard, even the high mileage cars that were selling for $5,000 a year ago, cost around $7,000 today.

“It’s not a great time to buy a used car, and I hate to say that. I’m a dealer, but it really isn’t a great time,” said Leonard.

As for inventory, Leonard said the lot is down 25 percent, typically holding 400 cars and now only having 300. However, he said cars that are easier to get are ones being imported from other countries.

He attributes this to three factors:

  1. The global microchip shortage

“I think the pandemic was a huge part of this because the microchip company burned to the ground,” said Leonard. “That was a big, huge plant that burnt down.”

2. Rental car companies

Leonard said that because of the pandemic, many rental car companies ended up selling off most of, or their entire, inventory last year.

3. The demand for used cars

“Now everybody wants to travel and they have no cars to rent so they’re out buying used cars, so they’re driving the price up,” said Leonard.

Leonard recommends that anyone in the market for buying a used car, make a move now because he doesn’t see the market changing until the end of the year.

“I don’t see it happening this year,” said Leonard. “If you were to ask me that two months ago, I would have thought 90 days, but now that we’re in the middle of this, I really think that you’re going to see it happen after the first of the year (2022), just simply because of supply and demand.”

He said once the 2022 cars are being built and manufacturers release the 2021’s that are on hold, the public will see a “big change.”

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