Skyrocketing Cost Of Used Cars Hitting Not Just Customers, But Dealers As Well
ORANGE (CBSLA) - Gas prices are hitting record highs and so are used car prices, and while customers are struggling to find good deals, so are the dealers themselves.
"That price range between $5,000 to $10,000 is really competitive," said Taylor Ogden, who owns Drive Smart Motors.
According to the U. S. Bureau of Labor Statistics, the consumer price index for used cars and trucks jumped by nearly 41% from January 2021 to January 2022.
Ogden, an independent used car dealer in Orange, just returned from a trip to Oceanside where he snapped up an older model truck from a private party to resell on his lot.
"I wasn't comfortable with the price I had to pay for this truck. Two years ago, I would have never been anywhere near the price that I just paid, but that's the world we live in," he said.
Experts said the ongoing computer chip shortage has automakers focused on selling more profitable higher-end vehicles, which has caused the price of new vehicles jump by 12%.
People priced out of those vehicles are turning to used cars, but with such a high demand and short supply, prices of used cars are becoming untouchable for both customers and dealers.
"I'm bidding against Toyota stores, Hertz Rent-a-Car, Enterprise, and you have all these fleet companies as well that are all competing for the inventory. So, naturally, supply an demand is going to drive up cost of the product," said Ogden.
Ogden added that economy cars sell within hours, same with hybrids due to record breaking gas prices. However, he said people should not get discouraged because he believes the market should simmer down by fall. Until then, he said people should be patient and do their homework before purchasing a new or used car.
"Have your financing ready, in hand. Know if you're paying, if you need financing. If you do, get pre-approved so you can be the easiest person to deal with and you show up and buy it," Ogden said.