SAN JOSE (KPIX 5) – The old adage that you lose money as soon as you drive your new car may change as a drastic shortage of vehicles causes some used cars to sell for more than when they were new .
Used car prices are skyrocketing, and only if and when dealers can get their hands on them.
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âWe buy a lot of cars from our service customers, on the street and on other avenues, just to get inventory. And we are paying higher prices than ever before, âsaid Mark Normandin, owner of Normandin Chrysler. Dodge Jeep in San JosÃ©.
And that says something from a dealer who got his start in the days of horses and buggy.
âAll used car prices are increasing due to demand,â Normandin explained.
It all started with a shortage of semiconductors, which slowed down the number of new cars being built.
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Then the car rental companies – which sold their stocks last year during the pandemic – were unable to restock their fleets. So they started buying used cars, which created a shortage and pushed up the prices of used cars.
The dealers are so desperate that they ask for the leases to come back sooner or even
ask old customers to resell their old cars.
âI thought, ‘What? “Said DeeDee Taft, who recently received a notice from her Audi dealership asking her to buy back her ten-year-old Audi Q5 SUV. “They’re supposed to come back to me with a trade-in offer, or just to buy it.” They want to put these cars on the ground, there is just a huge demand.
The shortage of vehicles has led to an unprecedented situation where regular, non-collector cars appreciate rather than lose value, especially loaded pickup trucks and SUVs.
âWe’re giving them more on a trade-in than they bought the brand new vehicle,â Normandin said.
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No one knows how long the prices will continue to rise, but prices start to stabilize at major auto auctions where dealerships buy used cars. This could translate into lower prices in the weeks or months to come, according to auto industry analysts.