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Supply chain issues related to the pandemic have pushed up used car prices significantly in recent years. Used car prices have increased an average of 44% since 2019, according to car classifieds website CarGurus.com.
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Since used cars are at the lower end of the price spectrum, supply chain issues have a greater impact.
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“It’s harder to find good ones now and the prices are higher,” said Mark Scruggs, an independent dealer in Phoenix who buys 10 to 15 cars a week. “I look at auctions. You get an old car with 150,000 miles and lots of wear and tear. Once the dealer fixes the car, it sells for $5,000 or more.
For every $1,000 you add to your budget, you can buy a new car with fewer miles.
Fong Li, CEO of used car website iSeeCars, says shopping is easier if you take the time to research online before seeing a car in person.
For example, iSeeCars search filters can customize results not only by make and model, but also by age or by listing cars that have recently been reduced in price. Other car buying apps and websites let you filter out cars with reserved titles or from online retailers.
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When it comes to budget, you’ll want to choose a car that’s at least 10 years old and has at least 100,000 miles on it. While that sounds like a lot of miles, Scruggs said that in the past, if “a car hit 100,000 miles, it was done. Now, the spark plug isn’t replaced until 100,000 miles.
However, with a car this old and worn, you’re probably the real owner. A car’s resale value is more important than its history. With that in mind, try these filters on your favorite car buying app:
Your goal is the lowest mileage, one-owner, accident-free vehicle you can afford. It would be even better if there is a vehicle history report showing repair history.
The cars that come out may not be stylish, efficient or luxurious, and they may not be exactly the kind of car you want – but someone will keep running, seeing no reason to get rid of them.
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By carefully filtering your used dealer category search, you can find what you’re looking for locally. Vehicle history reports, such as CarFax reports, are increasingly integrated into dealer websites and car buying apps.
Craigslist and Facebook Marketplace are reliable options for finding cheap local cars, but they’re also exempt from many of the laws and protections that govern dealer sales. For example, ads may include vehicle history reports and even provide the 17-digit Vehicle Identification Number (VIN) you should be driving. There are also some remedies if you have been scammed.
Additionally, vehicles sold privately are not inspected or repaired. Dealers can put new (but cheaper) tires on older cars; private sellers may not. If you plan to buy from a private group, budget $100 to $200 for the inspection.
Mark Holthoff, manager of Klipnik.com, a community site for used car enthusiasts, says if you’re looking for a car with minor cosmetic flaws, such as fading paint, that will lower the price but won’t affect mechanical performance, you’ll get a better deal for your money. It will be better spent. feature.
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However, Scruggs warned that the “Toyota or Honda divide” – the premium imposed on these leading Japanese brands because of their reputation – would undermine the value proposition when buying a budget car.
Be open to more affordable Japanese brands like Mazda, Nissan or Mitsubishi or even American cars. Scruggs said his auction experience has taught him that the same money can buy an American car that is five years newer and has less mileage than a comparable Honda or Toyota.
Ten years from now, who owns the car will matter more than who makes it. Property records can tell you a lot, but so can a personal inspection. “If there are hamburger wrappers all over the inside, they probably didn’t change the oil,” Scruggs said.
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Across the country, the used car market is booming. The average price of used cars and trucks in April was up 10% from the same month last year and 21% higher than the same month last year, slightly higher than the 4.2% increase in the Bureau of Labor Statistics’ latest consumer price index.
Mark Kugman, third-generation owner of Kugman Motors, a used car dealership in St. Louis. St. Louis, Mo., spoke with host Kay Rysdahl about what’s driving inflation and what it means for his dealership. What follows is an edited transcript of their conversation.
Kai Rysdal: I’m going to cut the thread here, sir. Kugelman: How has used cars changed in the current economy?
Mark Kugelman: Well, I have two answers – one is simple, and one is a little more complicated. Cars are scarce, so prices rise.
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Kugelman: Well, the longer version is that production is reduced to new cars. Used car dealers rely on the new car market to drive our sales. We need inventory. I can’t call the factory and ask them to send me extra used cars. We have to buy them through auctions or trade-ins, and there is very little inventory on the new car market right now.
Kugelman: Well, we’re looking beyond the framework of virtual auctions. I was a little out of my comfort zone, I got to see [the cars] up close, and we pay a higher price for quality cars. Most importantly, we pay for shipping and logistics costs. …So they force us.
Rysdahl: Yeah, I think so. But look, you have to pass those costs on to your customers. There’s no way I’m going to the Kugelmann Auto Factory to do a deal now, right? Should you pass it on?
Kugelman: Well, we do it as much as possible because we want to be competitive. In today’s market, anyone can go online and see how much these cars are worth. The problem is, there’s a lag between what actually happens and what Kelley Blue Book or Black Book thinks the car should sell for.
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Rysdahl: You know, it all comes down to semiconductor and all the supply chain stories we hear, all signs are that these issues are not going to be solved tomorrow. So the question is, how long will these prices last before something stops working?
Kugelman: Well, it’s going to impact sales, if it hasn’t already. In fact, interestingly, our sales have increased. This is a time of exceptionally high demand, and if you need a car, you need a car. Holy. St. Louis is an amazing city, but our public transportation isn’t that hot, especially if you’re a shift worker getting off work at 2 a.m. from the hospital or elsewhere. I think the demand is really high because of the incentives.
Rysdal: Please tell us more about this incentive. People have money in their pockets that they can at least partially use to buy a car?
Kugelman: Yeah, a guy who needs a car, and all of a sudden you have $5,000, and you put it away, and that’s when it’s time to look at cars. I’ve heard some of my competitors say, “I won’t buy anything until the price comes down,” which is bullshit. We want to serve our customers. Instead of raising prices, we are trying to sell more spare parts, maybe extending the warranty, trying to do gap insurance
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