Car rates

Car dealership hopes ‘we’re off peak’ as used car prices drop slightly | national news

(The Center Square) – Used car prices are falling slightly as new car inventory increases and buyers reach their price cap.

The upward trajectory of used-car prices, fueled by the shortage of new cars, appears to have leveled off, with average prices nationwide in April $21 cheaper than in December, according to data from Edmunds.

Illinois Automobile Dealers Association attorney and spokesman Larry Doll said the price drop was also being seen in Illinois.

“It’s going to take a while, obviously, as the new vehicle shortage trickles down to used vehicles, but hopefully we’re not at peak,” he told The Center Square.

New car inventory is the most important factor when it comes to used car prices.

“The average daily supply of our sample is around 71 days – I have enough cars to sell for 71 days,” Doll said. “A few months ago it was 30 days on the new side.”

Used car inventories fell from 42 days at the end of last year to 49 days as of May 15, according to Doll.

The exorbitant prices have also deterred many buyers, who simply refuse to pay the going rate for a used car, the Wall Street Journal reported.

Over the past two years, used car prices have soared 45% — a faster rise than new car prices, according to the article. At the end of last year, they averaged $29,969, according to Edmunds.

“Affordability is definitely an issue,” Jeff Williams, chief executive of America’s Car-Mart Inc., a chain of used-car retailers in the Midwest and South, told The Wall Street Journal. “What we hear from customers, and potential customers, is that the prices are too high.”

In April, the US Department of Labor’s consumer price index showed that prices for used cars and trucks fell 0.4%.

Now might be the best time to buy a used car that Illinois has seen in a while.

However, depending on the production of new cars, prices are fragile and could go up if there is another interruption in production, Doll said.

“It’s probably a good time to buy, depending on your needs, because we don’t know when the next production disruption will happen on the new side that will ripple through the entire supply,” he said. -he declares.

Doll said that relationship means it will take some time for prices to stabilize, noting that COVID-19 variants are wreaking havoc in Asia, where most semiconductor chips are produced.

And U.S. companies planning to produce chips domestically can’t count on them for another year or two, he added.

“I mean, just to get back to normal production levels, there’s always going to be buyers kind of waiting for the market, so it could be a year before we get back to what we call normal,” he said. said.