Used cars are in demand, and dealers are asking leases to be returned early; the increase in demand is resulting in a price surge for used cars.
Dealerships are also checking in with their customers to see if they would want to sell back their old cars, as they desperately need stock.
“We’re buying a lot of cars from our service customers, off the street and other avenues just to get inventory in. And we’re paying higher prices than we’ve ever paid,” Mark Normandin, owner of Normandin Chrysler Dodge Jeep Ram in San Jose, told CBS SF Bay Area.
Pickup trucks and SUVs are gaining value instead of losing them, an extraordinary situation the automotive industry is currently experiencing. The microchip shortage -- the chips used in the manufacturing of new vehicles -- has been a factor in the growing demand for old vehicles.
Adding to the shortage of these vehicles are car rental agencies that have started buying used cars to restock their fleets, which they sold last year as the COVID-19 pandemic unfolded and the demand for rental cars plummeted with far fewer travelers than usual.
Industry analysts say that vehicles prices are beginning to level off at large auctions where dealers purchase used cars, which could later on translate into lower prices in the next coming months.
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