If you haven’t already seen the news reports and advertising from your local dealerships, the used car market is hot right now!
Fewer new cars are being made due to a semiconductor shortage, and the high demand for personal vehicles has auto dealers seeking quality, used vehicles to fill their lots. The cost of previously owned sedans, pickups, and sport-utility vehicles climbed 10% in April, the fastest rise ever from data going back to 1953, according to Bloomberg and the Bureau of Labor Statistics.
It’s never been a better time to sell your used car and trade up to take advantage of the top-dollar offers.
For example, Chip Diggs, the digital marketing director for the Seelye Auto Group in Michigan, said his wife was offered $10,000 more than what she owed for her leased 2020 Kia Telluride. This was back in February when things were just starting to get crazy. The kicker: before she even walked out the door, the dealer had already sold it, Diggs said.
“Every car right now is going for higher than what the book value is,” said Diggs, adding he’s seeing vehicles sell for $2,000 to $5,000 more than what it was bought for just 90 days ago. “It is absolutely crazy. Most dealers are buying vehicles out of their service lanes because we know the car and the service history. It’s easier than ever for a customer to sell their car. Especially with low miles, market values are higher than they’ve ever been.”
There’s also a demand for higher-mileage, lower-priced vehicles though, so don’t discount your older car if you’re thinking of selling.
Jordan Barrett, the digital marketing director for Liberty Buick and Liberty GMC in Arizona, said his brother had a Ford truck with 150,000 miles that recently sold for $3,000 more than what he was offered a few months ago. The work truck demand is also high.
Barrett also saw a 2017 Kia Soul sell at auction for 30% higher value than it would fetch 14 months ago.
“Used cars are a big focus for us right now, and we’re offering aggressive trade-in offers,” said Barrett, adding his dealership will beat any other Arizona dealer’s value on a used car by $500. “We’re seeing such a high demand for used cars with the population growth in the area, people taking advantage of stimulus money, and more people taking road trips instead of flying. We haven’t had as much of an economic downturn, and the demand for used cars hasn’t gone down.”
So why not sell to Carvana or Vroom?
While these online used-car retailers make it sound so easy to sell your car, in truth, it’s more convenient and personal to go to your local dealer.
Working with online retailers means you will have to wait until they find someone locally to pick up your car and then wait to get your check and pay off your vehicle. With your local dealer, because they’re in your market and can do the physical inspection the same day, you can receive your check typically within 24 hours. You can have your car paid off in a couple of days instead of weeks, Diggs said.
“Although Carvana and Vroom give you a cash quote to buy your car quickly online, that doesn’t translate into getting your payment quickly,” he said. “The inspection process takes time, as does the scheduling to pick up the vehicle. Local is just that, local. It gives the client control of when, where and how the transaction will happen, either in-store or at their home or office.”
A dealer will also give you that personal touch and be there when you need them. Dealers have teams in place to help the consumer as they continue in their ownership experience, said Rachel Pullen, the vice president of new car operations at Brown’s Car Stores in Virginia.
“We have a parts department that will help with accessories. We have a service department that will fix your car,” Pullen said. “We’re there if you have questions about your Bluetooth. We will be there when you’re ready for your next vehicle.”
Another important aspect is that your local dealers are a part of your community. The businesses are giving back to local nonprofits and employing a local workforce.
“We invest in the community and our people,” Pullen said. “There’s a story behind the consumer and the brand.”
The moral of the story is, don’t wait if you’re looking to sell or trade-in your car! If you had an offer three months ago, get it re-evaluated because you’ll probably be offered more, Diggs said. And conversely, if you’re looking to buy a new car, and you find one you like, buy it now because it most likely won’t be there next week.
Happy selling and trading-up!