How to increase the price of a used car

 

Rising prices are slowing, but prices are still high.


By Benjamin Preston


According to the May 2022 Consumer Price Index report, the rise in used car prices has cooled slightly since its sharp rise in 2021, but prices are still 22% higher than the previous year. Simply put, the shortage of new cars continues to weigh on the used market. TrueCar analyst Nick Wollard, a consumer reports partner who tracks industry trends and provides a platform for auto-listing, says that although interest rates and fuel prices are high and used cars Prices are still high, a ray of hope has emerged. .


"We're seeing more vehicles marked than in the same period last year," he says, adding that most of that comes from used cars, especially low-fuel-saving models.


According to publicly available CPI numbers, current used car prices are still 48% higher than in the first quarter of 2020, before epidemics led to massive shutdowns and market disruptions. Rising prices have helped boost the country's overall inflation rate.


Pet Ryan, CEO of CoPilot, an app that helps car buyers track prices and find the best deals, says that according to their data, some brands and types of vehicles are more expensive than others. At the bottom are the subarches, which he says are selling for about ً 6,700, which was considered normal a few years ago. Trucks and SUVs are $ 10,000 more than usual, on average, and at a higher level, used Teslas are selling for about $ 20,000 more than usual.


Ryan says the result is that older models are now cheaper.


"If you can afford to buy a used car for 20,000, you can still get one, it will be an old car for the same amount," he says. "If you are considering buying a car that is one to three years old, the prices are still very high."


Guide House Insights analyst Sam Abulisamid, another auto industry analyst firm, estimates that inflation, high interest rates on auto loans, and high dealer markups are largely reducing demand.


The story continues.


"Besides, people are probably accustomed to scarcity and just don't show up unless they need a car right away," he says.


For those who need a car right now, higher prices can be frustrating. But Lauren Lauren Donaldson, senior consultant at PureCars Accounts, a consultancy that advises dealerships on marketing strategies, says those who own a car for sale have a built-in advantage.


"The silver lining for consumers is that even though prices are high, the value of your business will never be higher than it is today, and this can put you in a better position to buy a new car," says Donaldson. Says Donaldson.


In good times and bad, Consumer Reports members can search our used car marketplace for cars for sale in their area, depending on the factors that matter most. The lists include CR reliability and owner satisfaction ratings, and a free Carfax report for most vehicles. Members can also access classification and information on used vehicles that are 20 years old.


The relatively high cost of used cars was pushing many buyers to buy new cars a year or so ago. But globally the shortage of semiconductors continues to grow, with many carmakers still having fewer new cars that consumers want to buy.


Now even rental car companies - many of which sold cars during epidemics when car fares and travel generally fell - are either buying used cars or increasing their fleet to meet the growing demand. Keeping it longer than usual to bring it back. .


The government said in a release that the most widely seen consumer price index in May was 8.3 percent higher than a year earlier. This is after an average inflation rate of only 1.4% in 2020, when the COVID-19 epidemic kept many people at home.


Lack of chip

The lack of semiconductors has put a pinch on the supply of microchip processors that carmakers need for new cars. Chips control everything in the car, from infotainment screens to window motors. Many experts say this is the main culprit behind the current tightness in the market for new and used cars, and has also affected the availability of other consumer products.


And it doesn't seem to get better anytime soon. Last month, Pete Gelsinger, CEO of Intel, one of the largest chip makers, lowered his forecast on when semiconductor stocks would return to normal. Now, he says, it could spread by 2024.


"Experts expect it to move forward, and as far as consumers can go for alternatives, there aren't many options," Wollard said.


what can you do?

Although the prices of used cars have risen faster than the prices of new cars, experts say that the spike is a double-edged sword. Dealers are trying to get as many used cars as possible to meet customer demand, and that means you can get the most dollars if you want to sell or trade.


Donalson says dealers are most interested in finding cars that are less than 2 years old, and that the 3 to 5 year range is the next most sought after.


CR experts say that regardless of the price, the most important thing is that you should bargain when the time is right for you. If it is now, you can take advantage of your trades to get the best deal. If you decide to wait, know that future prices are difficult to predict, especially when global supply chain problems plague automakers. The market will eventually calm down, but that may take some time. So if you want to buy now, do your research on current prices and deals, and be prepared to consider various models to increase your chances of significant savings.


Gabe Shenhar, associate director of CR's auto-testing program, says: "Cars are still in short supply and prices are high. This is still not the best time to buy a car." "If you need a car right now, focus on two or three fuel-efficient models that fit your budget, and to see what's available, the web like TrueCar, CarGurus, and Autotrader. Find a wide range of sites. Keep in mind that you may not be able to negotiate more prices in this market.


Conversely, used car prices could begin to fall in the near future, Ryan says.


"Prices are already starting to cool, and it will accelerate as interest rates rise," he says. "People are tired of paying 98% of the price of a new car for a used car."


More from Consumer Reports: Top Pick Tires Best Used Cars for 2016 at $ 25,000 and Less 7 Best Mattresses for Couples


Consumer Reports is an independent, non-profit organization that works side by side with consumers to create a better, safer and healthier world. CR does not endorse products or services, and does not accept advertisements. Copyright © 2022, Consumer Reports, Inc.


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