Used vehicles in high demand as new supply dwindles
Apr. 30—The used car market is hot. Red hot.
Jeff Rudalavage, co-owner of Pine Line Auto Sales in Archbald's Eynon section, said the dealership usually has 25 to 35 used vehicles on the lot but currently has 10.
"We've been in the business for 33 years and this is the hottest I've ever seen it," Rudalavage said. "It doesn't matter if it's a $500 car or $50,000 car or truck, everything is just tough to buy. Dealers are struggling to get cars because they're selling well above Kelley Blue Book and NADA values."
Automakers are facing a global shortage of semiconductors — chips used to calibrate cars' fuel injection and run infotainment systems — leading some major manufacturing plants to temporarily close. The result is driving up the price of both used and new cars.
New vehicle inventory at dealerships was down by 36% nationwide in March compared to last year, according to Edmunds, a car shopping website. Compounding the problem, full-size truck inventory was down by 60% and large SUV inventory decreased 56%.
"The chipset shortage has snowballed into a bigger crisis for the automotive industry," Jessica Caldwell, Edmunds' executive director of insights, said in a statement.
The average price for used vehicles is expected to hit $22,663 this year compared to $20,273 in 2020, according to data from Edmunds.
"The prices for used cars and trucks are through the roof right now," Rudalavage said. "It's hard to replace what you're selling because the supply and demand is overwhelming."
Darryl Jayne, general manager of Gibbons Ford in Dickson City, has also seen an influx of used car buyers over the past 60 to 90 days.
"It's a pretty good combination of two things," Jayne said. "We're coming into selling season because most people are planning their vacations. And, with restrictions on other types of transportation, everyone feels safer and more comfortable in their own vehicle as opposed to a plane, train or bus. The fact that new car manufacturers are suffering because of a lack of parts is also pushing people to used ones."
Jayne added many shoppers are willing to spend more for certified pre-owned vehicles due to the lack of new choices.
"Right now, pretty much anything $25,000 or less is very desirable," he said. "Unless you're purchasing something in the high teens to mid twenties it's hard to find because everything is an SUV or four-wheel drive."
While customers are paying more for used cars, they are also being compensated better for their trade-ins.
The average value for all used vehicles traded in during March hit an all-time high of $17,080, according to Edmunds data.
The inventory turn rate for used vehicles has also been shortened significantly.
"It's typically about a 30 to 45 day process," Jayne said. "Now, it's two to three weeks max and some have actually been days."
Contact the writer: rtomkavage@timesshamrock.com; 570-348-9131; @rtomkavage on Twitter.
