HomeMy WebLinkAbout20210224 Buenos Hill Auto Site Plan (8) 9/13/2020 Looking to Buy a Used Car in the Pandemic?So Is Everyone Else-The New York Times
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Looking to Buy a Used Car in the Pandemic?So Is Everyone
Else
Eager to avoid public transit and Uber, and to save money, buyers are emptying dealerships.
By Neal E. Boudette
Sept.7, 2020
Used cars are usually overlooked in the fanfare accorded to cutting-edge electric cars and
gussied-up pickup trucks. Now they are suddenly the industry's hottest commodity.
Consumers are snapping up used vehicles as second or third cars so they can avoid trains,
buses or Ubers during the coronavirus pandemic. Others are buying used rather than new to
save money in an uncertain economy, not knowing when they or their spouse might lose a
job. Demand for older cars has also been fed by a roughly two-month halt in production of
new cars this spring.
Across the country, the prices of used cars have shot up. The increase defies the conventional
wisdom that cars are depreciating assets that lose a big chunk of their value the moment they
leave the dealership. In July alone, the average value of used cars jumped more than 16
percent, according to Edmunds.com.
In June, the most recent month for which data is available, franchised car dealers sold 1.2
million used cars and trucks, according to Edmunds, up 22 percent from a year earlier. It was
the highest monthly total since at least 2007.
The boom has turned the business of selling cars upside down. Because used cars don't come
from factories in Detroit, dealers are having to work as hard to buy cars as they typically do
to sell them, they say, including running ads and cold calling people to ask if they would be
interested in selling their old car. That's how strong demand for used cars has become in the
pandemic.
"Used cars are supposed to depreciate, but I'd look up the book value of a car on the lot and
see it was higher than at the beginning of the month," said Adam Silverleib, president of Silko
Honda in Raynham, Mass. "I've never seen that before."
Mr. Silverleib recently sold a 2017 Honda Pilot with 22,000 miles to Suzanne Cray and her
husband. The family had gotten by with just one car. But Ms. Cray, a nurse who works at Tufts
Medical Center in Boston, said the family had decided it needed another to ensure that no one
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911 302020 Looking to Buy a Jsed Car in the Pandemic?So Is Everyone Else-The New York Times
had to ride with Uber or on public transportation.
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Suzanne Cray and her husband bought a used Honda Pilot so they wouldn't have to ride
on public transportation or use Uber. David Degner for The New York Times
"We used to take Uber to restaurants, especially if we were going out with friends and didn't
want to drink and drive," said Ms. Cray, who has treated patients with the coronavirus. "We
don't do that any more. We take our car instead."
The boom is of a piece with other unexpected trends in a recession that has left millions of
people unemployed and has devastated airlines, restaurants, hotels and small businesses.
Despite that pain, the pandemic has been a boon to old standbys of the economy, such as
canned and processed foods and suburban home sales, that had fallen out of favor in recent
years.
The auto industry's equivalent of the three-bedroom ranch with the charming backyard patio
is a low-mileage car or S.U.V. — a lot cheaper than the newer version but just as good at
taking the family to a socially distanced picnic after months of isolation.
The growing desire to own a car has caught many people by surprise and unnerved others
who are worried about what it might say about the future of cities and transportation. Mayor
Bill de Blasio, who gets around in an S.U.V., recently implored New Yorkers, many of whom
don't own vehicles, not to buy a car, saying they represent "the past."
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9/13/2020 Looking to Buy a Jsed Car in the Pandemic?So Is Everyone Else-The New York Times
Those fears might be overdone. Buying a used car does not increase the number of cars on
the road, of course. And sales of new cars are not taking off. If anything, part of the sudden
mania for used cars stems from the yearslong rise in the price of new cars and trucks. On
average, new vehicles now sell for about $38,000, more than many consumers can afford or
are willing to pay.
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In addition, many Americans realize they don't have to worry that they're buying a rattle trap
that's constantly in the shop. Cars and trucks of recent vintage are better made than those
from a couple of decades ago, and certainly compared with the vehicles Ralph Nader
inveighed against in his 1965 book, "Unsafe at Any Speed."
Take Susan Sutherland, a tech worker in Bradley Beach on the Jersey Shore, who prefers
buying new cars but recently purchased a 2016 Nissan Rogue because the cost of new
vehicles put her off. "I paid $42,000 for the first house I bought," she said. "I couldn't imagine
paying almost that for a car."
Before the coronavirus, Ms. Sutherland regularly rode trains to New York City, Washington
and beyond to see her son's heavy-metal band,Tooth Grinder. But after a tough battle with
the coronavirus that included two stays in the hospital, she decided to trade in her 2008
Mitsubishi sport utility vehicle for a newer car she could rely on for longer trips.
She paid $13,500 for the Rogue, which is loaded with heated seats and other frills. "I love it,"
she said. "I'm really happy."
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9/13/2020 Looking to Buy a Used Car in the Pandemic?So Is Everyone Else-The New York Times
The president of Silko Honda said some low-mileage vehicles were snapped up within
hours of arriving on the lot. David Degner for The New York Times
Other consumers have gravitated toward used cars because there still aren't that many new
cars to choose from. Although automakers have restarted their plants after halting
production for about 60 days from late March to mid-May, they haven't made up for the lost
time.
In the first seven months of the year. automakers produced 6.6 million cars and light trucks in
North America, according to Automotive News. Those were three million fewer than they
made in the same period in 2019.
Early in the pandemic, when many people avoided leaving home for all but the most pressing
needs, carmakers offered no-interest loans for as long as 84 months to lure buyers. With new-
car inventories low, such generous incentives have mostly disappeared.
But people with a car to sell still have some leverage. The strong demand for used cars has
lifted trade-in values, a boon for some car buyers. Ms. Sutherland was shocked to get $2,000
for her Mitsubishi, which had 245,000 miles on it.
In July, Edmunds found that the average trade-in value rose almost $2,000, to just over
$14,000.
AutoNation, a chain of 325 dealerships across the South and West, has begun buying cars
from anyone who brings a vehicle into one of its stores — whether that owner is shopping for
a new one or not— and sellers are cut checks on the spot. It acquired more than 3,500 used
cars in July, up from about 2,000 that it typically buys in a month, said Marc Cannon, an
executive vice president at the company.
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9/13/2020 Looking to Buy a iced Car in the Pandemic?So Is Everyone Else The New York Times
Just north of Chicago, in Antioch, Ill., Mark Scarpelli has staff at his family's Chevrolet, Kia
and Chrysler dealerships hunting for used cars for sale. "We run ads on the web, on
Facebook, on Instagram," he said.
Business is so brisk that low-mileage used cars don't stay on dealer lots for long. Mr.
Silverleib, the Honda dealer in Massachusetts, said vehicles like the Pilot he sold to Ms. Cray
might last mere hours.
"They're gone before we get to take pictures of them," he said. "They never even appear on
the website."
This banner year for the used car will — inevitably — end. Automakers will catch up on
production, dealer lots will swell with new vehicles again, and enticing sales incentives will
return, said Jessica Caldwell, a senior analyst at Edmunds. But demand for used cars could
stay brisk if the pandemic worsens in the fall and the economy weakens further even if the
supply of new cars improves.
"It won't last forever," Ms. Caldwell said. "But for now it's a great time to trade in a used car."
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