SHOPSMART AUTOS – CUSTOMER INFORMATION – JUNE 1, 2021
It’s a tough time to find a used car or truck, maybe the toughest ever, and that’s because the market is experiencing what a leading auto industry economist calls “the perfect storm meets the perfect drought.” That is, a perfect storm of consumer demand is running headlong into a perfect drought of used vehicles in dealer inventories, says Tom Kontos, chief economist for KAR Global, a wholesale used-vehicle auction firm. Higher-than-ever used-vehicle prices are the inevitable result. In fact, in the current supply-and-demand environment, it’s a challenge just to find the exact car or truck buyers want, let alone get a good deal on it. Prices rose 6.9% from December to March alone, according to data from online, new- and used-car marketplace CarGurus Inc. More details on the big economic picture and how long these high prices might last are below. But first, some practical ideas from used-vehicle retailing insiders on what to do about it.Looking For A Used Car in 2021
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For consumers, analysts have some commonsense pointers that should help buyers:
Cast a wide net.
Using online shopping tools, it’s easy to increase the distance you’re willing to search, to see what used cars and trucks are available outside your immediate area, or even out of state, said Nick Woolard, a senior director of analytics for TrueCar, one of those online sites. Certified Pre-Owned programs offer some additional peace of mind when purchasing a car remotely or online, and a good deal or finding the exact right vehicle may offset shipping costs.
Think small.
Used-car prices are up across the board—on average, around 26% vs. a year ago, analysts said. Used pickups are especially scarce relative to demand. In March 2021, some 2018 Ford F-150 pickups cost nearly $10,000 more than a similar 3-year-old model cost a year ago, according to Manheim, another used-vehicle auction firm. Prices are up less sharply for small cars and small crossover SUVs. Pickup trucks are an especially in-demand segment in 2021, with supply shortages making it hard to keep both new and used units in stock. That may mean a long search if you’re after a very specific model. Daniel Acker/Bloomberg
Be patient.
Recognize it may take time to find what you want. “We do not see a magic bullet or tricks for getting around the current pricing environment,” said Stephanie Brinley, principal automotive analyst at analytics firm IHS Markit. “Our best advice would be to give yourself longer for the shopping process and recognize it will take time to find the best intersection between what a consumer wants to buy and the budget they have allocated to the purchase.”
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