OMAHA, Nebraska : Earlier in 2021, a woman with a tight budget of some $7,500 visited Jeff Schrier's used car lot in Omaha, Nebraska, and was shown three cars.
Schrier said the woman was stunned and said, That is what I get for $7,500? The woman settled in on a 2013 Toyota Scion with 160,000 miles on it, but Schrier is not sure he made any profit on the deal, he said. "We just helped her out," he told ABC News.
The prices for used cars in the U.S. have soared, leading to buyers being priced out of the market.
The average price of a used vehicle in the US in November had reached $29,011, 39 percent more than a year ago, according to Edmunds.com.
It is craziness and I have never seen anything remotely close to this, according to Schrier.
In the 12 months ending in November, consumer inflation surged 6.8 percent, the highest in nearly 40 years, the largest factor was the use of vehicles caused by the COVID-19 epidemic, according to the government.
The computer chip shortage has caused new-vehicle prices to go up, with the average new vehicle costing $46,000, according to Edmunds.com.
Ivan Drury, a senior manager at Edmunds, said he believes that November was a record for affordability, despite the fact that he doesn't track used vehicle prices relative to household income.
Karl Hogan of Canonsburg, Pennsylvania, near Pittsburgh, was able to sell his 2007 Toyota Tacoma small pickup truck, with more than 170,000 miles on it, for $6,500.
Hogan said that he did not have to budge from the asking price. David Paris, a senior manager at J.D. Power said that used vehicle prices are directly tied to the cost of new ones.
Although some automakers reported the computer chip supply is improving, prices paid by dealers at used vehicle auctions continued to rise through November, Paris said that we are not seeing any softening in prices, which is unusual for this time of the year. Paris expects the shortage of used cars to worsen through 2024, as rental companies can't purchase enough new cars and are holding onto their older models, with some even buying used vehicles.
Among the few consumers who want to sell used cars that they don't need to replace are those who want to sell them. In October, the average trade-in value was $9,000, twice as high as one year earlier, Paris said. People with no vehicles to trade in and only modest incomes have few options and buyers should consider a new vehicle if they can afford it.
If you look hard and are willing to wait and travel, you can find deals across most brands, he said.