Springtime car-buying season is here, and many hopeful buyers are ending up with a severe case of sticker shock in 2021, because used car prices are higher than ever.
Gary Heflin, owner of Courtesy Automotive, is busy these days.
Eric Oliver, owner of Beyond Exercise gym, has bought two cars from Heflin in the past, and he plans on buying an SUV from Heflin.
“I prefer buying used,” Oliver said. “You can get some good used vehicles in very good shape.”
But used cars are not such bargains anymore, with Edmunds.com reporting prices up 14% over the past year.
Heflin said there are several factors, and one is that new car prices have hit a record high of $40,000 on average.
Combine that with rental fleets no longer flooding the market with cars and buyers flush with stimulus checks, and you have a supply-and-demand imbalance.
“There’s a lot of people in the market,” Heflin said. “It’s just like with home sales and car sales. They are both doing well. But there’s a shortage in both markets that drives up prices.”
Heflin said Jeeps and any kind of truck, “especially pickup trucks, cargo vans, and work vehicles,” are the most in-demand vehicle.
Ford F-150s are flying off the lot, he said, despite their higher prices.
Next to pickup trucks and Jeeps, he says, three-row SUVs for the family, like a 5-year-old Suburban he has on his lot, are the hottest sellers for families.
And, unfortunately, you will pay a lot more for them now.
What you can do
Want to spend less than $15,000? Heflin said buy a 4-door sedan, not an SUV or pickup, which are commanding premium prices. Sedan prices are up only slightly this year compared to years past.
Heflin recommends 3- or 4-year-old Kias and Hyundais. They come with a five-year bumper-to-bumper manufacturer warranty, which is the best in the business. If you have any problems that first year, Heflin said, you are fully covered at no extra charge.
Want to spend under $10,000? While there are plenty of cars for sale at that price point with 100,000+ miles on them, Heflin cautions that there are not many low-mileage ones available.
“If you find something under $10,000 that you feel good about, don’t wait,” Heflin said. Those cars are often sold in a few days.
Just make sure you get the CARFAX report and have an older used car inspected, Heflin said, because many high-mileage cars under $10,000 can be money pits with rusting frames or engine problems.
If you feel like prices are too high for what you want, drop down a car size and take your time. You’ll eventually find something, with dealers predicting lower prices this coming fall. And that way, you don’t waste your money.
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