(Arlington) Sell your used car at the same price, or even more, despite higher mileage? This is the unprecedented consequence of soaring prices in the United States.
Posted at 4:13 p.m.
“It’s a totally new trend” which is not about to stop, said Aurélien Guillaud, owner of Arlington Auto Group (AAG), a car dealership based in Arlington, Virginia.
Consumer prices soared in 2021 in the United States, + 7%, unheard of for nearly 40 years, fueled by even steeper price increases for used cars and trucks (+ 37.3%) .
Since the pandemic, automakers have struggled to get their hands on some parts, especially computer chips imported from Asia, slowing production of new vehicles.
With the shortage of new cars, there has been an influx of demands for used cars, says the Arlington dealership.
In addition, car rental companies, unable to acquire new vehicles, have stopped quickly disposing of their old cars, draining the used vehicle market and driving up prices further.
“If you compare to a year ago, you buy the same car for 20,000 dollars instead of 16,000 dollars and sell it for 24,000”, explains Eddy Malikov, manager of AAG.
Outside, in the parking lot, around 40 cars are waiting for their new owner. Last year, AAG sold 300 to 400 cars despite price increases that turned a number of customers away.
And, recent strict lockdowns in China to contain the Omicron variant could exacerbate the chip shortage, pushing the influx of new cars to a more distant horizon.
Towards a market collapse?
In the United States, the appetite for used vehicles can also be explained by the fact that Americans are increasingly reluctant to take public transport due to the never-ending pandemic.
“Elsewhere in Europe, people go to buy a scooter or a motorbike. Here, it’s the car because of the distances to be covered, ”observes Aurélien Guillaud.
Suddenly, prices go up.
“We have a customer who bought his car for $ 21,000 in 2019, who sold it for $ 21,000 two years later with 10,000 more miles (16,093 km),” says Eddy Malikov.
In other cases, the cars are even sold for more, he says.
“I look on the forums […] and there are people who admit buying a car to resell it in two weeks “,” it is a way for people to make money “, notes Aurélien Guillaud.
But he warns against this potentially dangerous practice, because in Virginia, individuals are allowed to buy and resell no more than 5 cars per year.
In a recent study, the KPMG firm stresses that the boom in the used car market is not set to last.
“History teaches us that the current frenzy in the second-hand market will eventually stop,” write the authors, pointing out that chip shortages and supply chain problems will subside. .
“The powerful industrial machine will come back at full speed and the car parks of the dealers will once again be full”, they estimate. Then the market will “collapse”, they add, predicting a drop of 30% from its level today.
They recognize, however, that it is difficult to know when this will occur and whether the decline will be “steep or slow”.
A sign that manufacturers seem to be banking on a boom that will last a while yet, General Motors announced on Tuesday its intention to launch CarBravo, a new online used vehicle market for GM brand vehicles, to compete with dealers. online such as Carvana and CarMax.