Maybe you've already noticed the uptick, but prices for used cars are at an all-time high.
Related: Used car prices in Detroit increased more than 20% over the last year, study found
“This is unprecedented. We have never seen retail prices at this level and trade in values at this level,” said Emilie Voss, Carfax director of public relations.
How high? In Detroit, the average used car price is up more than 20 percent. That's $4,482 higher on average, according to iseecars.com.
“Used car prices have been going up for a couple of years, but all of a sudden this year they have gone through the roof. And it's easy to figure out why. There’s just a shortage of really good used cars right now and there is unprecedented demand and that means prices go up," said John McElroy, host of Autoline.
Experts say much of the catalysts for the lagging inventory are pandemic related. Rental car companies usually sell their cars off to used dealerships after certain mileage thresholds. As people hunkered down and travel became sparse, they liquidated much of their fleets, and now with travel back up, they aren't selling, and buying instead.
The global chip shortage is another contributing factor.
“The car companies had to shut down for about 8 weeks, you know, 2 months. Then they went flat out to try to catch up. They didn’t catch up. And then the chip shortage hit. So now there’s 1.5 million fewer vehicles in inventory than automakers would like to have," said McElroy.
It's slightly good news if you're trying to sell a car, but there's a downside.
"Look, if you are in the market to sell a used car, you are going to get the best price you ever could have dreamed of getting for it. But if that means you gotta turn around and buy a new car? Guess what? That’s where that money is going to go," said McElroy.
The situation could be ideal for those families who now have someone who can work remotely and may be in position to share a car. The best advice, according to experts, if you can, hold on if you need to replace the car you’re thinking of selling.
The market isn’t expected to return to something resembling normal until potentially 2022.
If you do need to buy a car, you should still do your homework. The same two used cars may not be truly equal.
"Two or three years later, they don’t have the same value. Because of their unique histories ... nothing impacts value more than history," said Voss. "We still recommend taking it for that independent inspection, have a trained mechanic look the vehicle over. Look at the vehicle's history on a Carfax report and take it for a test drive."
One local dealer we spoke with said they’ve received offers for two-year-old F150s with 25,000 miles at MSRP prices.
