Katherine Mondo has been on the hunt for cars for over three months. From her home in Berkeley, she dodged an online car scam, mourned a vehicle in Texas that slipped through her fingers, and is now considering an almost-too-old Subaru in Sacramento.
As used car prices skyrocket by more than 40% from a year ago and buyers outbid vehicles, Mondo’s dizzying journey is the norm in one of the toughest times. infuriating to buy a used car in recent history. Think of the exasperation of the Bay Area housing market. The past year ranks among the highest awards increases ever, according to the consumer price index, with new cars also up 12%.
“I realized now is the worst time to buy a car,” said Mondo, who is pinning her hopes on a Toyota RAV4 with less than 150,000 miles. “Instead of scrolling Instagram, I scroll Craigslist.”
Across the country, used car buyers are being forced to lower their expectations and increase their budgets by hundreds or thousands of dollars.
The jaw-dropping prices are symptoms of a market still dealing with the aftermath of the pandemic, as automakers struggle to ramp up vehicle production and meet booming demand amid shortages. of chips.
“Everything in the market right now is driven by this shortage of new vehicle inventory,” said Mark Schirmer, spokesman for Cox Automotive, owner of Kelly Blue Book. “This shortage has pushed more buyers into the second-hand market.”
The average list price for used vehicles is now $27,633 with an average of more than 71,000 miles on the car, according to analysis by Cox Automotive.
Meanwhile, people who have purchased cars in recent years are seeing their cars retain value and, in some cases, appreciate in value.
The best advice for potential used car buyers from multiple car dealerships? Wait, if you can. The market is still too hot, they say, and if you don’t urgently need a car, delaying the purchase for a few months or even longer is a smart move.
“I don’t think I want to go on The Mercury News telling people not to buy cars, but it’s the truth,” said Jerry Griggs, who runs the stroller bank in Berkeley, a car showroom that mediates between private sellers and customers.
Currently, Griggs has a 2018 Subaru Forester that’s advertised at $29,600 – $3,000 more than the original sticker price four years ago. “If you’re buying, don’t go for that two-year-old car because the newer it is, the more you’re going to lose,” he added.
In the Bay Area, car prices fell, following national trends. Prices rose in the summer and fell in the fall to land 26% higher year-over-year. Then the sticker shock escalated further, with costs jumping 36% in December, according to the most recent consumer price index data for the region.
This led to jaw-dropping list prices. A new Toyota RAV4 Prime has been listing for nearly $97,000 — a markup of $40,000 — earning social media scorn. A Bay Area Man sold his car to Carvana, an online car dealership, for $90 more than he paid seven years ago for the brand new vehicle.
Schirmer said there could be a slight increase in used car prices over the next few months, in line with the traditional spring price hike that coincides with tax refunds, but Cox economists expect the market to stop soaring and stabilize this year around current levels. . But there are no signs of a return to near pre-pandemic levels.
“Do you know of anything that gets cheaper over time? Schirmer joked.
Nate Myler, sales manager at One Toyota in Oakland, has had a front-row seat to the new car shortage. Before the pandemic, the dealership motto of only selling cars at MSRP, or list price, was nothing special. But now the dealership has more than 1,300 people on waiting lists for new vehicles, with wait times for the particularly coveted hybrid-electric RAV4 Prime of up to two years. He fielded requests from dealerships as far away as Florida wanting to buy new cars and sell them used at a markup.
“Our dealers made themselves comfortable,” Myler said. Instead of dealing with thrifty customers looking for cost savings, they now mostly take calls from people willing to wait months and pay list prices. “Be patient,” he advised. “If you jump on something for $5,000 above MSRP, you’ll be in a terrible resale position.”
Mondo, the Berkeley resident, knows she entered the used car market at the worst time in modern history. But she hopes that by spring she can find the needle in the haystack – a perfect RAV4 for her budget. When she gets her dream car, she plans to load it up with camping gear and take a trip to Yosemite.
“I’m sick of thinking about it,” she said. “Until I start thinking about it again.”
Have you entered the market of buying cars or have you recently purchased a vehicle? Share your tips and tricks for scoring a great deal in the form below. We may use them in a future story.