Well, it was bound to happen sooner or later. U.S. used car prices are up 30% over June 2010, in some cases besting Kelly Blue Book values by as much as 25%. Trade-ins are also up by 30% since this time last year.
A variety of factors, including an economy still reeling from the Global Financial Crisis, high gas prices and the Tōhoku earthquake, are thought to be responsible for the massive price rise.
It’s bad news for used car buyers, what with skyrocketing prices and an ever dwindling supply. Bob Penkhus, owner of Colorado Spring’s Bob Penkhus Motor Co. Describes the situation thusly:
“It’s kind of a perfect storm going on right now for consumers. We have had more trade-ins in the last 30 days than ever before in our history.”
Add to that the big Japanese carmakers, which are still struggling to meet demand stateside after the production problems caused by the March 11 earthquake and tsunami. Toyota, Honda, Nissan and Mazda have all been affected. Ali Kargaran, the general sales manager of Bakersfield Mazda, relates:
“[We’re] actually running out of cars. Mazda basically shut down the factory. We can’t even order the cars for the next couple months.”
Fewer new car sales equates to fewer used vehicles a few years down the track, with year-to-date new cars sales down by 36% and more than 3 used models being sold for ever new one. The North American car market is not expected to return to pre-GFC levels until at least 2016.
By Tristan Hankins
Via MSNBC
