If you’ve been thinking about getting your car off of your hands, now might be the best time to do so. According to the Consumer Price Index from the Bureau of Labor Statistics, the cost of used cars and trucks has gone up 22.7% compared to this time last year. While this trend affects the entire country, it’s been impacting cities the most. Miami has seen a 35.9% increase in the price of used cars from March 2021 to March 2022; New York City has seen an increase of 35.2%; and San Francisco an increase of 36.9%.
If you’re in the market to buy a used car, we have some tips for you, but if you’re in the market to sell yours, now is a great time to make someone else’s misfortune your good fortune.
Why exactly the price of used cars has gone up
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The prices of used cars going up is the result of a confluence of forces. The first force is the product of supply and demand for the new car market. The price of buying a new car has gone up considerably during the pandemic, thanks to a global computer chip shortage, an increased price of labor and production costs, and supply-chain delays. Because of this, many consumers are turning towards the secondhand market in an attempt to save a buck. This, in turn, affects the supply-and-demand of the used car market, with the increased competition driving up prices (not unlike what we’re seeing in the housing market).
Combine this with the second force—inflation that’s been affecting goods across the board—and you’re going to see unsustainably high prices on the used car market. You should know this window will not be open forever. Used cars are already down from their peak price, and are predicted to keep dropping as the year progresses.
How to sell your used car
When selling your used car, you have two options. First, you can sell it to a used car dealership, who will then take care of selling it. This option will ultimately result in less money in your pocket, but is the path of least resistance. Second, you can try selling it yourself—a higher risk, higher reward path. Yes, you won’t have to pay a commission or sell your car at a discounted rate, but you’ll be culpable to the new buyer should your car crap out on them soon after purchasing.
Regardless, Kelley Blue Book recommends doing the following preparations to your car if you want to sell it at the highest possible price.
- Shampoo carpets
- Clean dashboard, seats, mirrors, and otherwise put a shine on all surface areas
- Remove all stickers and magnets
- Repair dents, dings, and scratches
- Replace any burned-out lights
- Fix windshield chips and cracks
- Check the brakes and consider replacing them if they’re worn down
- Inspect your tires and determine if replacment is needed
It’s impossible to know exactly where the car market is heading, but all signs indicate the clock is ticking on this used-car frenzy. If you want to hold on to your car for a few more years, that’s your prerogative. But if you do want to sell, try not to wait too much longer.