Lack of equipment and consequent lack of new vehicles has been a major problem for automakers and new-car dealers alike but it is affecting used car sales in an attractive way. Prices are high, of course, but you may be surprised that mileage is high and many dealerships are now selling used cars with six-digit odometer readings.
There are many factors involved in the game, but there is probably nothing significant about the lack of equipment. Dealers across the country and across different sections and populations are struggling to get enough stock to sell new cars to customers. This fall has forced those same dealers to rethink how they move into used cars for business.
In the past, it was not uncommon for most high-mileage trade-in vehicles to be put up for auction instead of being put up for resale. Vendors can make some quick money while continuing to focus on new-car sales and invest nothing in used cars. Now they are keeping them to sell themselves.
Read more: These used cars and SUVs now cost more than when they were new
Traders don’t seem to be offering much more for trade-in than in the past but they know that resale value can provide space for profit. Although not all that bad, as noted in a recent Automotive News report, cars are getting longer. It is not uncommon for cars sold for 100,000 or even 200,000 miles or more to sell for $ 10,000 or more.
At the same time, there are risks for new-car dealers who have changed their minds and are willing to sell these high-mileage cars. For one, their reputation is on the line. Many buyers would not hesitate to put an unreliable car against the dealer who sold it, even if they had 200,000 miles on the watch when they bought it.
This is the second risk that comes with investing in cars. High mileage vehicles require one degree or another of reconditioning so that the dealer is more likely to sell himself and less likely to disappoint a customer. One thing seems clear though, and that is that the price of used cars will not fall to pre-epidemic levels anytime soon.