For several months, shopping around for a car, either new or used, meant dealing with a huge lack of inventory driving prices up. But the market is finally starting to show signs of improvement.
Cheryl Lucas, like so many car buyers right now, was stunned by high prices for both new and used vehicles.
"It's ridiculous. People can't afford them anymore," she said.
Ford dealer Matt Sander, though, has seen some good news on the horizon at his dealership, Woody Sander Ford. While his customers continue to face long waits for hot sellers like the new Ford Bronco, new cars are finally rolling in again.
"We have Bronco Sports, Escapes, Edges, even F-150's," he said.
After a year with very little for sale, Sander said, "there is finally quite a selection here."
Good news for car buyers
One year ago, many new car showrooms were empty. That, in turn, sent buyers outside to the used car lot, causing prices to spike on those used cars. Now, as inventory begins to comes back in and higher interest rate prices are causing some buyers to hold off, the pricing pressure is starting to ease on the used models.
According to the automotive site, i-See Cars.com, used car prices have improved slightly since January, but only slightly. The average 2 to 3-year-old gently used vehicle costs just 1% less than the new model. Analyst Karl Brauer of i-See Cars said the difference should normally be closer to 20%.
"Just to get that car, right now, people will take a used one more expensive than a brand new one," Brauer said. "Because the new ones aren't around, and the used one is sitting right there."
The full-size Bronco is a prime example. Since there are year-long waits for a new one, if a buyer can find one at all, 1 and 2-year-old Broncos are selling for $10,000 over the price of a new one — though the smaller Bronco Sport does not have that price spread.
Brauer said people in the market to purchase a car have a few options:
- Hold off a little longer, if possible because rices are expected to improve even more this fall.
- Continue to invest in your current car until then.
- Look beyond the local market for cars.
- Always look up the price of the new version before paying a high price for a used model.
"The trick is to find the new one that's even available," Brauer said, "or this whole problem wouldn't exist if the new ones were widely available."
Sander is hoping he'll soon have even more new cars on his showroom floor, though I-See Cars said it could be a year before supply and demand is back to normal.
So start checking with local dealers to see if they will soon get in the new model buyers want, and that way you don't waste your money.
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