Sticker Shock: Why Used-Car Prices Are So High The supply of used cars is tight, while demand is high. That can provide a big boost to car owners thinking of selling, but it can make affordable vehicles hard to find.

A Pandemic Sticker Shock: Used-Car Prices Are Through The Roof

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Used car prices have been going up over the past few months. This is one side effect of a pandemic. As you can imagine, this has been a welcomed surprise to people looking to sell cars but challenging for anyone in the market for an affordable car. Here's NPR's Camila Domonoske.

CAMILA DOMONOSKE, BYLINE: It's an iron-clad law of the used-car market - as cars get older, they get less valuable, right? Not so fast. Add used-car prices to the list of things turned topsy-turvy in 2020.

IVAN DRURY: Anybody who tracks them or anybody who owns a vehicle themself has looked, they would be shocked, I think, almost flabbergasted, in fact.

DOMONOSKE: Ivan Drury is the senior director of insights at automotive data company Edmunds. He's been watching used-car prices soar. And he experienced it firsthand. He bought two cars last year and sold them both a couple of months ago.

DRURY: And actually made out on one and broke even on the other, which was remarkable, to say the least, and defies any normal depreciation schedule or anything.

DOMONOSKE: So what the heck is happening? Well, car plants shut down in the spring. That meant a shortage of new cars, pushing more people into the used market. Meanwhile, plenty of people want cars, especially because of concerns about spreading the virus on public transit or shared rides. Low supply, high demand - it's Econ 101. Prices have gone up and up and up. Aaron Springer of Odenton, Md., is selling a 2014 Volkswagen Jetta SportWagen. He bought it about a year and a half ago, then recently heard the market had gotten hot.

AARON SPRINGER: I decided, you know, I'm not really looking to sell it. I love this car. Well, let me go see what exactly they're paying. And it was big.

DOMONOSKE: Used-car site Caravana offered him $1,500 more than he paid for it in 2018.

SPRINGER: I mean, it's just too good of a price to not sell it.

DOMONOSKE: And drivers whose leases are ending now might also make a tidy profit. The buyout price that was set three years ago, it could be thousands of dollars under today's market value. So drivers can buy out their leases and immediately profit off a trade-in or sale. This wild increase in used-car prices is good news for sellers. And it's tough on car buyers, who have been having a hard time finding affordable options during this pandemic.

DANIELLE JENNINGS: I just wanted to be able to get to work and be able to, you know, take care of my family.

DOMONOSKE: Danielle Jennings lives in Baltimore. She had just started a new job this summer when her 17-year-old car died.

JENNINGS: It just completely, like, threw in the rag on me.

DOMONOSKE: She looked at the used-car market.

JENNINGS: Yes, I did. Oh, my God. Yes, I did.

DOMONOSKE: But with no luck.

JENNINGS: My back was against the wall to come up with a down payment that would satisfy the lender, for me to be able to get a car that I can afford to maintain and my everyday monthly bills.

DOMONOSKE: Jennings wound up getting a 2013 Chrysler 200 through a non-profit called Vehicles for Change. It takes donated cars and gives them at a discount to people who need transportation. Vehicles for Change says it's seen an increase in requests for help since the pandemic started. But it has a work requirement. And with so many people unemployed, there are a lot of people it can't help. Vehicle affordability is not a new issue. But the spike in used-car prices is just another example of how the pandemic economy is hitting the haves and have-nots really differently.

Camila Domonoske, NPR News.


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