Used car prices on the rise in Michigan, nationally

Used car prices on the rise
Published: Jan. 4, 2022 at 6:40 PM EST
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LANSING, Mich. (WILX) - $29,000 used to be the price of a decent new car, but after the chip shortage and turbulence of the auto industry over the last two years, it’s currently the average price of a used vehicle.

Related: $29,000 for an average used car? Would-be buyers are aghast

This rise in price is impacting dealers and buyers alike. News 10 has received reports of people selling their own vehicles for more than they purchased it for, and while that’s great, it’s having an adverse effect on dealerships.

“The prices aren’t going to go down,” said Jefferey Dice, owner of Dice Auto Sales.

Dice predicts the high prices of used vehicles will keep going up, but it’s not just the buyers that are impacted, dealerships will take a hit too.

“They’re not gouging the prices because they want to make a lot of money,” Dice said. “The prices that they’re buying them and bringing them in on trade-in definitely reflect the retail prices, for sure.”

“A lot of people look at the new car prices and they think, ‘Wow, I think maybe I’ll back away from that and shop for a used car,’ but that puts upward pressure on used car prices,” said MSU economics professor Charles Ballard

Ballard said that since there’s a limited amount of new vehicles, the demand for used cars has going up, which are driving the prices even higher. While it is a seller’s market, people need to make sure they aren’t selling a car and then, in turn, having to buy one.

“For a lot of people, the money is going to go in one way and go out the other end,” Ballard said. “You may not really may not make a whole lot of money off of it if you’re buying and selling.”

Lori Manyen sold her Jeep to Carvana, a dealership that buys and sells cars online. Because they’re starved for inventory, she turned an unexpected $700 profit.

“I didn’t want to have to deal with the public and people coming to our home, so I went on Carvana and literally six days later we closed,” Manyen said. “They came, picked up my car and handed me a check and it was done.”

When Carvana made their offer, it caught Manyen by surprise.

“I was very very surprised when they said $700 -- it was like $725 more, so I’m like ‘Heck, yeah, I’m going to take it,’” Manyen said.

The Dean at Eli Broad College of Business at MSU said another big reason there’s a hike in prices is because rental car companies aren’t able to replace their fleets with new vehicles. That means the old ones aren’t finding their way to used-car dealership.

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