High Demand, Low Supply Hikes Used Car Prices

Demand for used cars is up and so are the prices, according to a study by Kelly Blue Book. When the economy was really bad, car companies didn't produce as much. So now there are fewer 2008 and 2009 used cars.

Copyright © 2011 NPR. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

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.

Copyright © 2011 NPR. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to NPR. This transcript is provided for personal, noncommercial use only, pursuant to our Terms of Use. Any other use requires NPR's prior permission. Visit our permissions page for further information.

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.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.