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Used car prices spike amid pandemic

Posted at 5:00 AM, Aug 18, 2020
and last updated 2020-08-18 08:07:15-04

OLATHE, Kan. — Shoppers in the market for used vehicles may be surprised by how quickly cars are selling and at what cost.

It all comes down to supply and demand.

"Our new inventories have not come back up, so the value of those used cars is really at a high level," said Karl Kramer, McCarthy Auto Group chief marketing officer.

The pandemic disrupted production of new vehicles, so the used market is flooded with demand.

According to Edmunds, the car research site, the average listing price for a used vehicle rose by $708 from June to July, when it came in at $21,558.

Analysts describe it as an unprecedented historic shift.

"Consumers are being more financially responsible, interest rates and (certified pre-owned) offers have been extremely favorable, and inventory has been severely limited on the new side," said Ivan Drury, Edmunds' senior manager of insights.

In this seller's market, buyers looking for used cars will need to act fast.

"That vehicle that we want to make an appointment for you to see tomorrow, beyond tomorrow it may not be here, and that's just a reality of the demand from the consumers," Kramer said.

The spike in prices is expected to cool off as dealerships build up inventory over the next few months.