Buyers and dealers of used cars experience sticker shock
WAUSAU, Wis. (WSAW) - Prices of used cars have skyrocketed lately due to high demand. According to iseecars.com, used car prices in Wisconsin are about 28% higher across the state and buyers aren’t the only ones taking a hit to the wallet.
Dealers struggle to purchase used vehicles at auctions.
“So I’ve been doing retail automotive for 20 years and the prices at the auction are unlike anything I have ever seen,” said AJ Stark, Car Smart owner.
Stark said the last two months were the worst it’s been since the pandemic started. Rental car dealerships are hard for independent dealerships to compete with.
Long wait lists for new cars have swayed rental companies to get more used vehicles recently driving up the auction prices.
“I’m watching 3-year-old cars that will go through the lane and sell at the auction for more money than they were brand new 3 years ago,” said Stark.
Last year Stark sold a lot of 2018 and 2019 Dodge Caravans for $16,995 with around 50 thousand miles. 2021′s market doesn’t allow for that.
“Yesterday when I was at the auction I saw that same car run through the auction and bring $27 thousand dollars,” said Stark.
With market prices high, getting a vehicle loan could be a struggle. Many banks use Nada Book Value to evaluate a vehicle price to determine a loan. But the book is often behind from what the market is.
“That car that you bought that looked right around where all the other ones were priced at was several thousand dollars over the book value. It makes it difficult to get those cars financed,” said Stark.
Stark said people with bad credit scores will have even more of a challenge. Starks’s advice was to buy a car at least 4 years old that is already depreciated a lot until the market turns.
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