Sell Us Your Car; Post-Pandemic Seller’s Market for Used Vehicles!
The pandemic that we are hopefully on the way to coming out of disrupted most people’s lives and virtually every industry in our economy. The automobile industry is of course included in that and there are many changes that consumers need to be aware of. Chief among them is how the used car market has gained a new prominence, with many new buyers shifting to used. This has created a seller’s market for used vehicles, with dealers able to sell used vehicles for a higher price, thus able to buy them from their owners at a higher price.
Noted auto industry resource Edmunds has demonstrated how the market has shifted in favour of used vehicles, detailing how consumers can benefit by selling their vehicles to dealerships, either for cash or trade-in. The statistics and numbers are American, but we have witnessed precisely the same trends in Calgary.
The Edmunds data shows an uptick in used car prices in July 2020 compared to July 2019, with the average listing price climbing $708 to $21,558. This is a marked increase because traditionally, dealers note that prices in the summer actually decrease, due to natural depreciation of vehicles. Thus, with many parts of the economy opening up after the spring shutdowns, it is safe to assume that these reversal of traditional trends is due to pandemic related issues.
According to Ivan Drury, Edmunds’ senior manager for insights, “We’re seeing evidence of more typical new-car shoppers gravitating toward the used car market than usual during the pandemic due to a combination of factors: Consumers are being more financially responsible, interest rates and CPO offers have been extremely favorable, and inventory has been severely limited on the new side,” A combination of financial considerations, interest rates and shutdowns affecting new car production, have therefore given rise to rises in the used market. In fact, Edmunds notes that for 2017MY vehicles, prices increased across every vehicle category.
Due to this upshift in demand for used, Drury also warns, “Although used vehicles continue to offer significant discounts compared to new, used-car shoppers will find themselves in the unusual position where they might not have as much negotiation power because demand is so high and dealers will be less inclined to be flexible.” Therefore, buyers need to go into the process knowing what they can afford and “be prepared to act quickly if you have your heart set on a vehicle.”
Another Edmunds Executive director of insights, Jessica Caldwell, states “More consumers are looking for value in their next car purchase due to the economic challenges of the coronavirus pandemic, so the more favorable loan conditions we’re seeing are likely a direct result of more consumers with good credit shifting into the used market.”
This is backed up with data from Edmunds showing that while the average amount financed for a used car has gone up slightly in June 2020 to $22,337 from $22,181 in June 2019, the average down payment has risen significantly to $3,167 from $2,665 over the same time period. This suggests that buyers with more liquid capital to spend are entering the used market as a hedge against overall economic conditions.
What this means for the seller is that the demand for used cars from consumers means the dealer demand for your used car has gone up considerably, and you can sell it for much more now than in the past.
So, whether you want to sell outright or trade in on a new vehicle, Honda West wants to buy your used vehicle and you will benefit from the unique market conditions created by the pandemic.
We want to buy! Contact Honda West for an appraisal on your vehicle.