New Car Market Delays Drive Used Car Prices To Spike By Thousands
MINNEAPOLIS (WCCO) -- If you're in the market for a new car, you may have noticed "used" could be the way to go.
The pandemic caused a shortage of computer chips and other components needed to build new cars and trucks, which pushed used car sales up 10%. It's the largest one-month increase in nearly 70 years.
This unusual market is swinging in the seller's favor. Noah Ford just helped his parents sell their 2012 Jeep Wrangler, with about 125,000 miles on it, a couple of weeks ago.
"The market is so crazy right now that what normally would have been a $21,000 jeep, we were able to sell it for $25,000," said Ford.
Not only did Ford score more money, but he sold it fast.
"Within like 3 days it was sold," said Ford.
Normally when cars sit on the dealership lot, they depreciate in value over time, but not this year. A 2016 Honda CR-V on Keewaydin Auto Sales lot in South Minneapolis has already gone up $2,500 in the last 6 months, and a 2016 Acura ILX on their lot has gone up $4,500 in the last six months.
"It's definitely a sellers' market," said Adrhyan Spohn, who is a salesman at his family owned used car dealership, Keewaydin Auto Sales. He says are buying their used cars at wholesale for thousands more dollars than usual, so they have to sell them for more too.
"To stay competitive in the used car sale market you're going to list your car competitively," said Spohn.
To make sure a price spike doesn't keep customers away, Keewaydin Auto is doing everything to make sure their used cars don't feel used.
"New tires, new brakes, all the systems working on them, we don't want to have that customer complaining about problems down the road," said Spohn.
Ford is now helping his parents search for another used wrangler. Although their sale was sweet, the search for a new car has led to some defeat.
"We're having a tough time finding ones that are actually down in the price range because everyone wants one right now," said Ford.
There's no timeline on when the new car market will bounce back, but analysts are not predicting production will return to normal at any point this year.