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Saturday, July 24, 2021

A small win: Prices of used cars slip from dizzying highs

Dearborn, Mich. — For months, anyone who wandered the dealer lot in search of a used car could be forgiven for doing a double take — and then wanders off the lot.

Prices rose more than 40% from their levels to around $25,000 just before the viral pandemic hit. Vehicles were in short supply. And any hope of negotiating the price? good luck with him.

But now a ray of hope has come to the fore. The seemingly endless streak of skyrocketing used-vehicle prices seems to be coming to an end.

Not that one should expect a bargain. Although the average wholesale price that dealers pay is gradually falling, they will likely remain near record levels. So will the retail price for the consumers. Supply remains tight. And while demand has eased slightly, a steady influx of buyers could keep prices unusually high for a few more years.

“This is a short-term improvement,” suggested Paul Sugars, sales manager for pre-owned vehicles at Jack Demar Lincoln in Dearborn, Michigan. “Buyers are sitting on the fence, waiting to see what happens.”

Sugars should know. As internet and foot traffic at their dealerships have declined over the past few weeks, they began cutting prices on some of the 70 used vehicles in their lots. He says that now buyers have started returning.

One of them is Jessica Pitts of Detroit, who began shopping for a used vehicle last year after her car broke down. But as prices continued to rise, Pitts delayed his purchase. Recently, however, when Sugars cut the price of a red Lincoln MKC she was eyeing, Pitts took notice.

“That’s what brought it back to my attention,” she said. “The price had come down a bit.”

The red compact SUV, which has over 58,000 miles on it, costs the Pitts about $27,500, which is just a little less than $28,000.

The return of buyers like Pitts has prompted experts to suggest that demand will be high enough to prevent a sharp drop in used vehicle prices. One reason is that supply is still short. According to Cox Automotive, last month dealers had only enough vehicles to meet demand for 34 days – 11 days less than the same month in 2019, last year which was considered normal for sales of used vehicles .

Some feel that even a slight reduction in the prices of used cars initiates any slowdown or reversal in overall inflation in the economy. With the notable exception of wood prices, which initially only skyrocketed to fall back to Earth, many goods, components and services – from semiconductors and gasoline to clothing, restaurant food and household goods – have become increasingly expensive. So are labor costs, as labor shortages in many industries have prompted employers to raise wages.

Nation World News Deskhttps://nationworldnews.com
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