Used Car Prices are Up

Golden Valley, Minn. - A lot of people are searching for value when they decide to buy a car. But those good deals on used cars are taking longer to find. In many cases, buyers can expect to pay a premium on used.

Troy Peterson doesn’t have too much time to test drive. His car broke down, and he needs a replacement ride fast. Peterson said, ’It doesn’t necessarily have to be everything I want... but what I can afford.’ Affordability is the main reason why Peterson and so many others want to buy used. But the cars and the deals are difficult to find.

Auto Luxe in Golden Valley specializes in late model used cars. Lately, filling the showroom is a challenge. Ric Fohrman said in his fifty years in the car business, he’s never seen this kind of slim supply. Demand is high, and it’s driving up prices. Fohrman said, ’Prices at wholesale are ridiculously high. Dealers are screaming, pulling their hair out. We just really refuse to overpay.’ Fohrman said he doesn’t have a lot of selection on hand. Instead, he’s been finding cars to fit his client’s specific needs.

The automotive website Edmunds.com is reporting a jump in used car prices nationwide. Edmunds.com found that the average price for a three year old car in July was $19,248, up $1,800 or about ten per cent over last year. The prices of some higher end SUV’s have increased as much as thirty per cent. The jump in prices and the slim selection are having a negative effect on dealers across the state. According to the Minnesota Auto Dealers Association, sales for used cars in Minnesota have dropped seven and a half per cent from January through May of 2010.

Buyers are finding a lot of competition for bargains. Peterson said he’s still waiting for the right car at the right price. Dealers don’t expect the used car selection to increase for several months.