Why used car prices are so high right now

The chip shortage impacting new vehicles is causing used car prices to soar across the country, as well.

Tom Seyfried, the owner of Genesis Auto Brokers in Brentwood, Tenn., said during the pandemic factories closed so they didn’t need chips. As people return to work, the demand for them is back.

“Even if they’re making chips, they’re not getting off the boats, and then you’ve got to get them from the port to the manufacturers, which are all over the country, and it’s just adding up,” Seyfried said. “It’s definitely tough. We’ve had to be very upfront with our customers and say ‘now is not a great time to buy a car, if you got a car and you can hold off, hopefully, the market will correct itself and the prices will come back down.'”

Seyfried bids on cars at online auctions for his clients.

“We tell them ‘Hey, we’re going to look, but understand prices are high right now, so you saw this car for $20,000 in December. Right now, understand that that car is $24,000 or 25,000 — it’s gone up 26%.'”

He said if you’re in an accident, you might get more than your vehicle is worth to replace it right now, too.

“If you wreck your car now and the prices have gone back to where they were, you might have a pretty big difference in what you owe on the car versus what it’s worth and the insurance people pay you.” In addition, he said shops have been slammed with maintenance issues since people are driving older cars.

Seyfried hopes this is not the new normal. “Hopefully it will correct, but if I knew the future, I’d have a lot more money than I do right now!”

By Alexandra Koehn, NewsChannel5

About the Author

NewsChannel5

Learn More.