Used car sales up locally, prices remain high

Oct. 9—Although Bob Sheridan, owner of D&S Auto Sales, sold more vehicles this summer at his shop on South Washington Avenue in Scranton, he noted the cost of used cars has remained more expensive than normal.

"Everybody has to price their cars a little higher because it's costing a lot for us to get them and it started last year," he said. "You go to a car auction and where there used to be 1,000 to 1,200 cars a day, there are now 200 or 300, and 600 dealers trying to buy those cars, so the price goes up."

Just how much the price has jumped varies by vehicle, Sheridan said.

"It depends on the car, but they're going for a thousand to a couple thousand dollars more than they used to," he said. "A Chevy Impala may be worth more money at an auction than a Ford Escort because dealers know they're good sellers."

Sheridan anticipates even more vehicles becoming available by next summer or late next year, but noted the timeframe is dependent on the economy.

He stressed acquiring parts has also continued to be challenging and costly.

"Parts you thought you could get in a day are taking five days and the price of parts went up two or three times what they used to be," Sheridan said.

For example, during a call to Fenix Parts in Binghamton, New York, in late July, Sheridan was told the part he was buying that day for $40 would be $150 as of the next Monday, he said.

While the cost of used cars has remained elevated, Sheridan noted delayed delivery of new cars is leading customers to gravitate toward buying used.

"Used cars are available right now where new cars aren't," he said. "You're paying a lot more money for a new car and you're waiting six months to a year to get it."

Jeff Rudalavage, co-owner of Pine Line Auto Sales in Archbald's Eynon section, said the used-car market at the wholesale level has adjusted itself, but retail has been up and down.

"If people need a car, they're buying them but it's not like it was when everybody was getting money," he said.

Rudalavage has recently noticed more vehicles entering the market but stressed it takes time and effort for dealers to boost inventory.

"You have to go out and hunt," he said from an auction in Hatfield. "It all hinges on two things with the auctions: the condition report and the adjusted market value."

He added rental-car companies and new-car dealers contributed to the high costs of used cars.

"They didn't have any cars so they kind of controlled the market," Rudalavage said of the rental companies. "If a car was worth $25,000 and it had single-digit miles, they had to have it. They'd fight over them and pay $27,000. The new-car dealers became used-car dealers and that also jacked up the price."

Pine Line has about 30 vehicles, double its inventory from last year, and Rudalavage anticipates another six to eight coming soon.

Rich Crossin, dealer principal of Bonner Chevrolet in Kingston, said the inventory is similar to the beginning of the year, however the demand for used cars has slowed a bit.

He has witnessed the price of used cars drop slightly, starting during the summer, but said it has remained inflated.

"It's coming down and it's more competitive than it was, but it's still high for the customer," Crossin said. "That's the nature of the game right now. Used cars have had a high market value since COVID. "It's been really strong for the past two years, but it's not as crazy as it was."

Crossin believes rising interest rates may also hamper new-car sales in the coming months.

The average amount financed for new vehicles hit an all-time high of $41,347 in the third quarter of 2022 — up from $40,602 in the second quarter of 2022 and $38,315 in the third quarter of 2021, according to Edmunds, a car shopping website.

"They've gone up so high and they're going to go higher," Crossin said. "It's going to affect payments and leasing."

Edmunds forecasted a 0.9% dip in new-vehicle sales for the third quarter of 2022 from the same time last year, and a 2.7% decrease from the second quarter of 2022.

While a global semiconductor shortage cut into the production of new vehicles, Crossin added shipping issues have also prevented manufacturers from getting them to dealerships.

"A lot of it is transportation," he said. "The trucks are built, but they don't have anybody to deliver them."

Contact the writer: rtomkavage@timesshamrock.com; 570-348-9131; @rtomkavage on Twitter.