used cars

COVID-19 pandemic drives up values of used cars

LOS ANGELES (KABC) — If you’re in the market for a car, this could be a perfect time to do a trade-in thanks to the pandemic. But before you take advantage of these deals to buy a car, one of the most important steps you should take is finding out how much your vehicle is worth.

Omar Morales is in the market for a used car, and he couldn’t have picked a better time because used car sales have gone up dramatically.

Ryan Clements has been in the car business over 20 years. When the pandemic hit, his inventory plunged, manufacturing stopped, and shoppers were scarce.

“People completely stopped coming in, just stopped coming into the show rooms,” said Clements. “That went on for about two months.”

“At first when the pandemic started, people were nervous about their jobs, the economy, their lives,” said Jessica Caldwell, Executive Director of Insight at Edmunds.

Caldwell’s job is to track vehicle transactions all across the country, which shows not only what consumers are buying, but how much they are spending, what interest rates they are getting, even what vehicle they traded in. She says trade-ins are usually overlooked; but not right now.

“If you are doing an online offer, it’s probably not really negotiable, but if you are working with a local dealership I think it is a bit more negotiable,” said Caldwell. “I think that people should know that they are really empowered right now and if they are ever looking to sell their car, they have a third car sitting in driveway that they don’t need, and want to get rid of, do it now, now is the perfect time.”

Clements says he and his team sent mailers to lure loyal customers into trading in their cars, or even selling them out right to his dealership to beef up his used car inventory until production caught up. COVID 19 has changed the current buyer’s mindset.

“Most likely they are people that relied on buses or Uber or Lyft — they don’t feel comfortable doing that as much any longer, so they are looking to perhaps buy a car,” said Clements. “They want something that is inexpensive because they are unfamiliar with car payments.”

Some are essential workers who now need a car; others are families realizing road trips are the only way to get away.

“With airline travel being off, that has also spurred people coming in, going on the family trip some people might want to go to Zion or go see the Grand Canyon where in years past they would fly somewhere,” said Clements.

Morales may not have picked this time to buy a car, but he sees the silver lining.

“Unfortunately my car broke down, so I guess my car timed it well for me,” said Morales. “A lot of deals are still good from what I’ve been researching, so it’s really nice, ith everything going on that you can still get a good deal.”

Edmunds predicts that it will be a seller’s market for a while. But stresses, if you know you want to sell your car, do it soon. You might pocket some extra cash here too. Edmunds says if you lease your vehicle, find out how much it’ll cost to buy it in the lease, you might actually make some money if you sell it and just pay it off.

Copyright © 2020 KABC-TV. All Rights Reserved.

Source Article