Used Car Dealerships See Spike In Car Prices

Used car prices are skyrocketing, making it hard for buyers to get new wheels.

Car dealers have found themselves in a tight spot over the last few months. They have customers that want to buy cars but they're running out of stock, and that's driven prices way up.

McKee Motorsports Owner Whit Raskin and Hi-Tech Motors Owner Mike Asfour's problems start in the same place - the used car auctions where dealers buy the cars that fill their lots.

"Everybody is struggling. We're struggling, our customers are struggling," Asfour said.

"Everybody's scrambling, from the small guy to the big guy, it doesn't matter. It's very difficult and very competitive right now," Raskin said.

Asfour is seeing prices up to double what he'd normally pay, which makes his margins thinner and prices higher.

Raskin's had to cut his inventory in half, but it's not like they can just wait it out.

"We have to buy them," Asfour said. "We got to have them to sell them."

The problem traces back to new car dealerships, which have problems of their own. Supply-line shortages during the pandemic hit new car factories hard and put the brakes on production.

That's a problem for used car dealers, too. They get a lot of their stock from trades and car rental agencies who buy the bulk of those new cars.

"New cars stores, when they have inventory, it's going to drop for us because then they're going to have more used cars. And when we have used-car trades, then we have more used cars for cheaper," Asfour said. "They struggle, we struggle."

Asfour and Raskin expect the spike to last a few months to a year.