Used car prices rise amid economic worries
A used car lot sign.
Steve Chiotakis : Carmax just reported, and used car sales rose between 4 and 5 percent. The used car market's been doing well lately because buyers are anxious about the economy, and don't wanna buy new, which means there are fewer used cars for sale.
Marketplace's Alisa Roth reports.
Alisa Roth: Bill Willis is offering $50 to anybody who finds him a good used car. He owns three dealerships in Delaware, including one that only sells used vehicles.
Bill Willis: Supply is hard to get. That's our problem: Supply. Good quality, low-mileage used cars are becoming less and less existent.
New vehicle sales have dropped dramatically since the financial crisis, and people are hanging on to their cars for longer.
Leasing has also fallen off, so there isn't that regular flow of 3-year-old cars coming onto the market. And rental car companies aren't supplying as many as they used to either.
Willis says in some cases, used cars have gotten so expensive, customers are reconsidering, and looking at new ones instead, especially with cheaper vehicles, like a Chevy Malibu or a Ford Focus.
Willis: Boy, do I go ahead and spend $15,000 for a pre-owned or $20,000 for a new? The financing rates are generally better on a new vehicle than they are on a used vehicle. So all those things come into play and that's where you have to weigh the options.
But not everybody's weighing those options. Joe Spina is an analyst at Edmunds.com. He says the traditional used car buyer isn't interested.
Joe Spina: A lot of used buyers won't even go to the new lot. They'll just go looking for a used car, they're on the used car lot, they don't compare to the new car and then they just, they buy the used.
That's one reason used car prices will probably stay high for a while. Another is that nobody expects the pool of used cars to grow anytime soon.
I'm Alisa Roth for Marketplace.