Choosing a used car is a great option for many car-buyers; it allows you to get the most for your money, skip a lot of depreciation on a vehicle, and it can help out the environment by keeping a good vehicle on the road longer. At the moment, however, shopping for a used car is a lot more difficult than it was just a year or two ago. That’s not because dealers have run out of them; in fact, many dealerships have more used cars than ever before, it’s due to increases in price.
At the moment, a used car can cost you a lot more than it would have if you were looking to buy the same vehicle just over a year ago. One reason for that is pretty simple: COVID-19 and the impact it had on the auto industry. Unfortunately, there’s not a ton you can do about it, especially if you need to buy a vehicle right now, though there are a few ways you can try to take the sting out of the price tag. With any luck, this is a phase that will change as the world resumes regularly scheduled programming, but only time will tell.
The Situation at Car Dealerships
When prices on something go up, it’s easy to blame the seller of that item; after all, they’re the ones selling it, and they set the prices. So with used cars becoming more expensive these days, there’s a tendency to assume that used car dealerships are being greedy and inflating the price. While that may happen sometimes, in this instance, it’s largely not the case, as dealerships are finding themselves simply reacting to what’s happening with the car market.
There are a few different things happening right now that have made the prices for used cars increase, sometimes significantly. For one thing, brand-new cars are becoming more expensive––not only in general but also specifically. A lot of car manufacturers are finding that their budget or economy models just aren’t selling, so they’re canceling those models. What this has done, however, is make it, so the remaining vehicles being made and sold are those that always cost more, to begin with. So the average price for a new vehicle has gone up since the low-price models are going away in a lot of cases.
The second factor that has caused used cars to become more expensive is the impact that COVID-19 had on the auto industry last year. As manufacturing plants shut down, fewer new cars were being produced, which means there have been fewer new models available since then than there normally would be. And the third issue at play is that demand for used cars has greatly increased, which means there are fewer models available overall.
Even my introductory understanding of supply and demand in economics tells me that if you have increased demand and less supply, then prices go up. What we’re seeing is this play out in real-time over the last year. In addition to this, people are expecting more for their vehicles when they trade them in or sell them to a dealership––they’re worth more now, after all. So dealerships pay more for the used vehicles that are available and then have to sell them for more in order to make a profit and stay in business.
What this Means for You
All of that really means a couple of simple things for you: if you want to buy a used car right now, you’ll have fewer options than you might expect overall, and you’re going to pay more for one than you might like. Of course, the other side of this is that since used models have become increasingly in demand, dealerships are doing their best to keep as many of them as possible in stock. So even though they might be harder to come by, dealers know customers want them, so they’re being more aggressive about how many they have at any given time.
This doesn’t mean the price is going to go down, but it can mean that you’ll find more options at a given dealer than you would have a year ago. I know that sounds a little contradictory, but it’s pretty simple: overall, in large-scale terms, used cars are becoming harder to find, but individual dealers are doing their best to have more available. Although this can vary substantially from one dealership to another––a large dealer will have a better chance of maintaining a good stock of used models than a smaller lot.
So, what you’re looking at is this: overall, used models can be harder to find, but some dealerships are focusing on offering more of them than ever before. At the same time, the price of a used car will likely be higher than you might expect and certainly higher than you would’ve paid a year or so ago. However, if you have a trade-in, then this can be used to your advantage, as you may be able to get more for it than you would have in 2019.
How to Get the Best Deal on a Used Car
You have a few good options available to you if you’re looking to buy a used car and get the best deal possible. For starters, keep in mind that your best bet will probably be at a dealership with a large supply, as they’ll be best equipped to keep their margins low due to larger inventory. Of course, buying from a private seller will get you the absolute lowest price, but you’re also assuming a lot of risks when you go that route, so be careful.
Choosing a vehicle that’s less in demand than some other models can also help you save money. Sedans are largely going out of style, so that’s a great choice to save some money, while a hatchback can be an affordable option with cargo space pretty close to an SUV. Speaking of which, SUVs and trucks are going to be the most expensive options (aside from high-end luxury models), so if you want to save money, try to avoid those.
Figure out what you really need in a vehicle and stick to it. I know it’s easy to choose an upgrade or go for a flashier model because it has a great sound system or impressive rims, but they’re usually not worth it. You can always add a better audio system later, and flashy rims just cost more to replace down the line when you have one come off or get damaged. You’re better off saving money now and sticking to your budget.
If you Can, Just Wait
Finally, the best way to save money is probably to hold off on buying a used model right now, if you can. Obviously, that’s not always an option, and you might be in a situation where you absolutely need to get a vehicle right now––just do your best to keep your costs down. But, if it’s not an emergency and you can stick with what you have for a while, you’re going to be well served by waiting a year.
Yes, a full year––that’s how long experts are estimating this spike in demand and prices will last. So, if you can ride it out, there’s a good chance that prices on used cars in 2022 will be more consumer-friendly than they are right now. So be patient and keep an eye on prices, so you’ll be ready to make your move when supply goes back up.
