SANTA CLARA, Calif.—Car dealers and market experts in California say used cars are in higher demand and their value has risen, due to a shortage in supply of new vehicles.
Amid the COVID-19 pandemic, auto plants under lockdown delayed the production of new vehicles.
“We went three months without any of those vehicles being built; there’s sort of a hole in the inventory as a result. They can’t make up that lost production. A lot of the factories are running overtime, but they’re having a hard time catching up to the demand,” Matt DeLorenzo told The Epoch Times. He’s the senior managing editor at Kelley Blue Book, a California-based automotive research company.
It’s a good time for people to sell or trade-in their used vehicles for new ones, he said. Many people held off on purchasing vehicles when the CCP virus, commonly known as the novel coronavirus, first hit. Now, those delayed buyers are coming through en masse and the market is hot.
Large trucks saw the biggest increase in price—$2,300, on average, just from June to July—according to California-based automotive information company Edmunds. DeLorenzo said he’s also seen pick-up trucks and SUVs in highest demand.
But all prices have risen. Kelley Blue Book reported the average value of a 3-year-old car before COVID-19 was $19,270. It decreased to $17,178 at the lowest point in mid-April, and has now jumped up to $20,245, an increase of $975.
DeLorenzo said two other factors might be contributing to the uptick in demand: a renewed interest in road trips, and lower gas prices.
“With people working at home, the daily commute traffic is down considerably, and the demand for gas is down, so gas is relatively cheap. That also is a factor that bodes well for makers of trucks, SUVs, and less fuel-efficient vehicles like that,” DeLorenzo said.
For those in the lower-income range or laid off due to COVID-19, he says they may be able to bargain for cars that aren’t selling as fast, such as compact, economy, or midsize sedans.
Jim Bongiorno, used car manager at Stevens Creek Toyota in San Jose, California, said used trucks are in high demand there.
“You have to pay way too much money as a dealer to get them, whereas three months ago, we [were] getting good buys,” Bongiorno told The Epoch Times. “Of course, when we have to pay more, the consumer end, in the long run, is going to have to pay more.”
Bongiorno said their hybrid cars are also in high demand. They get vehicles from car auctions, other dealers, or trade. Most of their customers are working class, he said.
Attention Subaru owners: Your vehicle is in especially high demand right now. DeLorenzo said Subarus were already in short supply before the pandemic, and now it’s even harder to find a used one.
“Subaru buyers keep their car for 15 years, so they don’t sell their car,” Payman Shahni, internet sales manager at Stevens Creek Subaru, told The Epoch Times. “That’s why the used Subaru is hard to find.”