Used car prices skyrocket due to high demand and low inventory

Posted at 6:41 PM, May 18, 2021
and last updated 2021-05-18 18:41:01-04

FORT MYERS, Fla. — Low inventory seems to be a common theme for multiple businesses, not just the housing market. It’s seeping into the car industry, too, pushing the prices for new and used cars to new heights.

As businesses work to bounce back from the COVID-19 pandemic, and travelers hit the road again, the demand for used cars has gone up.

John Dileonardo has noticed a jump in prices when he looks to bring cars to the Modern Auto Sales lot on Cleveland Ave. in Fort Myers.

“In some cases 10 percent a month on used car prices. So, we’re really struggling, because we don’t want to overpay. That makes it harder for us to sell,” he said.

The low inventory is driving up those prices. According to data from Manheim Market Report, used car sales have increased by 4.5 percent from last month to this month, and the value for used cars has jumped by 48 percent from May 2020 to May 2021.

If the industry stays the way it is now, used cars could actually end up gaining value as soon as you purchase them. That’s good news for the buyer, but it could mean that dealerships take a hit, as soon as you drive it off the lot.

Dileonardo has been a salesman for nearly 30 years and says during a typical day the lot at Modern Auto Sales holds 120 cars at a time, but now that number is closer to 70. Prices are also higher, but he says customers are understanding.

“Even though our prices have moved, our average sales per month are the same,” he said.

He says a competing lot only has about a dozen cars in stock.

Driving schools are also getting impacted by the high demand for used cars. Jay Anderson, an instructor at the Stephen A. Emerson Driving School in Fort Myers says it took several weeks to replace cars that were rear-ended a month ago.

“It’s similar to the housing market where people are going into bidding wars. They’re doing basically the same thing for the used car market,” he said.

But, the higher costs for used sales isn’t all bad. Dileonardo says it could also work in the customer’s favor.

“If they have a trade in, and they’re upgrading, their trade in is now worth more money,” he said.

Dileonardo says he’s glad to see consistent sales here at modern auto sales, but he’ll be a lot happier when things get back to normal.

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