Buy 2 weeks and sell back The price is still higher than the new car? The U.S. used car market is in chaos

Reference News Network reported on January 24 that according to Agence France-Presse, an unprecedented phenomenon is emerging in the second-hand car market in the United States: the price of vehicles sold by car owners is as high as when they buy them, or even higher.

This strange price inversion comes at a time when the global shortage of computer chips during the COVID-19 pandemic has led to stagnation in car production and the price of used cars has soared. The rise in used car prices, in turn, led to record inflation in the United States last year.

Aurelian Gijo, owner of Arlington Motor Company, an auto dealership based in Arlington, Virginia, said it was "definitely a new trend" and that it was unlikely to end anytime soon.

He said the demand for used cars has increased significantly due to the shortage of new cars.

The U.S. Consumer Price Index rose 7 percent last year, the biggest gain in nearly 40 years, driven in large part by a 37.3 percent surge in used car and truck prices, the latest data show.

New car inventory during the pandemic is limited. Given the difficulty of obtaining semiconductors from Asian factories during the pandemic, car rental companies have continued to use their original cars, resulting in disruptions to past stable vehicle supply channels in the used car market, driving up prices.

Eddie Malikov, manager at Arlington Motor Company, said: "Compared to a year ago, the price you buy the same car now is $20,000 instead of $16,000. "But used cars sell for $24,000.

The dealership has 40 cars ready for sale, less than the usual pre-pandemic inventory. Arlington Motor Company did well last year, selling 300 to 400 cars despite price increases that deterred many customers.

The reluctance of Americans to use public transportation during the pandemic is also a factor contributing to the surge in demand for cars.

"Although the supply is not much, the demand is huge," Giyo said. ”

In Europe, he noted, commuters may choose to use scooters or motorcycles, but "in the U.S., you have to buy a car because of distance issues."

The price increase is staggering.

One customer bought a car for $21,000 in 2019, Malekov recalled, "and two years later, they ended up selling the car for $21,000 for more than 10,000 miles, which is ridiculous." ”

In other cases, the owner sells the car for even more than the price of the car.

Analysts at KPMG warned in a recent research note that the boom in the used car market will not last.

The report's authors said: "History tells us that the current frenzy in the used car market will come to an end. They point out that chip shortages and supply chain issues will eventually be solved.

Next, they said, "huge car-making machines will be back in operation and dealerships' garages will be full again," after which the used car market will "collapse" and predict prices will fall by 30 percent.

However, analysts also acknowledge that it is difficult to know when this shift will occur and whether the decline will "occur suddenly or slowly."

But there are signs that big automakers are pinning their hopes on the boom to last longer: General Motors announced Tuesday plans to launch CarBravo, the GM-branded online marketplace for used cars.

The business will compete with successful players such as Carvana and CarMax.

Some people are trying to take advantage of the used car market, And said that in some online forums, there are merchants who buy cars two weeks after buying a car and resell it online.

But he warned that Virginia law prohibits individuals from buying and reselling more than 5 cars a year. (Compile/Paint)