High Demand, Low Supply Hikes Used Car Prices
STEVE INSKEEP, host:
Used cars are now more expensive than ever. That's according to a study just out from Kelly Blue Book.
NPR's Sonari Glinton reports.
SONARI GLINTON: When the economy was really bad, car companies didn't produce as much. So, there are fewer 2008, 2009, 2010 used cars. Less supply, and on the demand side...
Mr. ALEC GUTIERREZ (Senior analyst, vehicle valuation, Kelly Blue Book): People are looking to save money wherever they can, so a used vehicle has turned out to be a great alternative to going out and dropping top dollar on a brand new vehicle.
GLINTON: That's Alec Gutierrez with Kelly Blue Book. He does nothing but study used car prices. He says demand for used cars is up and supply is down. That means the price is going up. Then there are the cars themselves.
Mr. GUTIERREZ: The vehicles that have been produced in the last, maybe three to five years, have been of substantially better quality - really across the board.
GLINTON: Gutierrez says because all the cars, including the American brands, are better, they're not losing their value as fast. And then there's the anticipated car shortages because of the earthquake and Tsunami in Japan.
Jesse Toprak of TrueCar.com says that has forced car dealers to pay customers more for their used cars.
Mr. JESSE TOPRAK (Analyst, TrueCar.com): So that they'll have more selection for somebody who walks into their dealership to buy a new car but can't find it. And that the hope is that they'll be able to switch them to a more recent used car.
GLINTON: Toprak says the higher prices will be a wash for consumers. They'll sell cars for more but buy them for more, also. Toprak says its dealers that win. They make bigger profits on used cars.
Sonari Glinton, NPR News.
NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.