Demand for used cars is starting to slow, AutoNation says
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AutoNation, the country’s top car retailer, reported mixed second-quarter results Thursday and gave us an update on the car shortage.
The company said new vehicle inventory and sales are still low, but demand for used cars has finally started to slow down. And soon, getting your hands on one might not require so much work.
Michael Castens of Little Rock, Arkansas, spent three months scouring the market for a used electric car.
“It’s sort of ‘Fury Road’ out there, like a ‘Mad Max’ vibe right now,” he said.
He finally found a Chevy Volt through an online retailer.
He paid more than he was hoping to, but traded in his old car for more than he was expecting.
“I bought my Honda in 2018 for $27,000, and I traded it for $27,000,” Castens said.
It’s tougher if you don’t have a vehicle to trade, said Lee Diaz. She and her wife have been worried about finding a car for their impending move from New York City.
So when a friend in California put their 2018 Subaru up for sale, she knew what she had to do.
“We were like, ‘OK, we need to jump on this,’” she said.
They spent $22,000 on the car, $1,700 to ship it and a lot of time managing the logistics.
“It honestly felt like project management at the utmost level,” Diaz said.
That’s what a lot of used car shoppers have been in for lately, said analyst Michelle Krebs with Cox Automotive.
“It just takes a little more work,” Krebs said. “It takes more research, it takes more flexibility.”
And a lot more money.
Used car prices are up more than 40% since before the pandemic, Krebs said, but inventories and demand are both approaching something we might call normal, at least compared to the new car market.
Joe Enten of Scranton, Pennsylvania, learned that the hard way. Last November, he thought he was trading in his 2017 Honda for a new electric truck.
“It’s now July 2022, and I never got my truck,” he said.
After months of waiting, he turned to the used car market and found a hybrid. It doesn’t check all his boxes, but at least he has something to drive.
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