What’s The Deal?

By Dave Welch • May 18th, 2011

You’ve probably seen or heard advertisements by car dealers that they want your used cars. And you may have noticed that pre-owned car prices are rising as fast as new cars. So, what’s the deal?

First, there is the $4 a gallon gas price, which has caused drivers to ditch the SUV path and buy the smaller four-cylinder 30+ miles per gallon cars.

Consequently, the pressure is on dealers to have these fuel-efficient vehicles in their inventory, and that has created a shortage at the wholesale level. The Manheim auction in St. Louis where I buy many of my vehicles saw a 14% increase in vehicle cost in April. Cars that were selling for $8,000 in March were selling for $9,200+ in April.

Big box dealers can’t buy them fast enough. Vehicle sales continue to be strong, but you will pay a premium for smaller fuel-efficient vehicles.

The bottom line is that the law of supply and demand drives the price. With that, if you’re interested in a truck or SUV, it’s a really good time to buy!



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