PORTLAND, Ore. (KOIN) — With car prices hitting all-time highs, KOIN 6 News talked to local auto dealers to help you navigate the soaring prices.
While automotive analysts for Kelley Blue Book are now reporting new all-time record-breaking prices for new cars due to a supply shortage, some are left wondering how that impacts the local car market.
“Last month, we saw 28% year-over-year gain on used car prices. That is crazy!” said Cox Automotive Editor Matt Degen. “These cars are actually going up in value and that just does not happen.”
Powell Motors, a family-run dealership, has been in the used car business for 88 years in Portland. Owner Vince Powell said they’ve had to adjust to the pressures of the pandemic, buying used vehicles that are five or more years old in order to swing a better price range for customers.
“I used to buy a lot of lease returns, 3-year-old lease returns, it was one of my favorite things to have,” Powell said. “[They had] great depreciation, good value for the customer — but they’ve escalated so much in price because there’s such a shortage of new cars that I wasn’t comfortable having to sell them at the prices they had to be sold at.”
The seasoned car salesman did have advice for people who must buy used cars right now. Powell said there’s still a lot of good value in buying something over three years old if you’re willing to buy something with a few more miles on it.
Some people want to buy cars under three years old or even new because they still have a factory warranty — but he says you can still buy an older vehicle and purchase an extended warranty if you’re worried about the costs of owning a car.
“I’m a firm believer in one-owner and two-owner cars because most one-owner cars have a great chance of being well taken care of by their original owner since they spent the most money for that car than anyone’s ever going to spend,” he explained.
He also said to maybe think twice before getting a car from a previous pet owner. Dogs are great, he said, but they are tough on interiors.
“I like to sell cars I’d like to drive myself and know that person can depend on it and rely on it.”
Powell said he’s never seen anything like this in his lifetime, where cars are going up in value this way. He said his dad, who opened the business during World War II, probably experienced a shortage much worse than today’s shortage.
He estimates it will take a couple of years to recover from this car shortage, so save up a little extra if you have to buy in that timeframe.
Powell said fellow Portland area car dealers working in the new car sector are also feeling the squeeze.
“If you look at their lots — they probably have 1/4th of what they normally have in inventory.”
“We’ve had 2 years of less cars being produced so it will probably take a couple years before the industry gets back to normal.”
On another end of the spectrum is auto dealers that specialize in commercial vehicles, like cargo vans and shipping trucks that are faring way worse.
“Extreme shortage,” Powell said. “There was always less of them in production, but the prices on those have jumped around $10,000 on vans that are 3 years old from what they were pre-pandemic days.”
He said there’s no new cargo vans to speak of yet everyone has increased their online shopping and home improvement projects. So contracting companies and shipping companies are so desperate they’re renting any van they can get their hands on.
“It’s different times,” Powell said.”
Degen, the Cox Automotive editor, said if you have an extra car you’ve been hanging onto, now is the time to sell. Your used vehicle is worth more now than it was even a few months ago.