The used-car market is booming, making it a good time for sellers—but not so much for buyers. With the economy reviving and also a shortage of new cars because of a global chip shortage, demand and prices for used cars are surging.
Lauren Donaldson, the senior director of accounts at PureCars, a consultancy that advises dealerships on marketing strategies, says consumer searches for used cars are double what they were a year ago. That means the cars are being sold a lot faster. She advises shoppers move quickly if they see a car they like.
“The silver lining for consumers is that even though prices are higher, your trade-in will never be worth more than it is today, and that may put you in a better position to purchase a newer car,” Donaldson says. “And if you’re a consumer who recently bought a new car and you’re feeling a little bit of buyer’s remorse, now is a good time to sell and move on to something else.”
According to the U.S. Bureau of Labor Statistics, used-car prices have jumped 21 percent since April 2020—10 percent of that increase was in April 2021. That compares with a 2 percent increase for new cars over the same period.
A month ago, the relatively high price of used cars was pushing many car buyers toward new cars, but now that a global semiconductor shortage has prompted many automakers to slow or pause production, new cars are more scarce. Now even rental car companies—many of which sold off vehicles during the nadir of the pandemic last year when car rentals and travel in general plummeted—are buying used cars just to bring their fleets back in line with rising demand.