NEW ORLEANS – There’s no escaping it: Over the past several months, price hikes have impacted nearly every aspect of American life.
Used-car prices surged this summer, peaking at over $25,000 for the first time ever in June 2021, according to data from Cox Automotive. In June 2020, the average price for a used car was about $19,500.
At Carbine Motorcars Direct in New Orleans, car buyers will find fewer cars on the lot. Owner Chris Carbine says he’s only purchasing about half of his regular inventory right now due to the drastic spike in prices.
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“It was rough at first,” Carbine said. “In purchasing we just have to be very careful in what we pay and feel comfortable that we can sell them.”
To do that, the dealership is expanding the types of cars it’s willing to sell.
“The perfect example is we have an ‘06 Altima that doesn’t necessarily fit in with the rest of the cars, but we need the inventory,” floor manager Daniel Haro said. “We have that on our showroom floor, which isn’t something we would usually keep or display.”
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Cox Automotive industry analysts say this surge in prices is “uncharted territory.”
“We have not seen this historically in the market,” analyst Kayla Reynolds said.
Reynolds blames the price spike on the chip shortage and the increased demand for new cars after pandemic lockdowns, but says more normal prices are on the horizon.
“Moving into Q3, the second half of the year, we definitely expect for prices to level out and also inventory to level out,” Reynolds said.
The salesmen at Carbine also believe there will be some relief soon, but until then they say they’re doing their best to help car buyers now.
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“If you need a car, you need a car,” Haro said. “Price used to be the most important thing when purchasing a car, now it’s availability.”
While sticker prices might be high, many car buyers are still making purchases after turning in their current vehicle for thousands more than its worth.
View more information: https://www.foxbusiness.com/markets/used-car-prices-could-drop-soon