Drivers have benefited from lighter traffic and cheap gas prices during the coronavirus shutdowns, and now as more people return to the roads there is another positive---cheap prices. According to a new report based on auto auction data, used car sales fell by 34% in April from a year ago, while wholesale used car prices dropped more than 11%.
Steven Wolf is general manager of Helfman Dodge on the Katy Freeway. He tells KTRH April was like a shock to their business, with his dealership even closing down for two weeks in order to reassess everything. "But when May opened, I think people felt---not normal, but kind of the new normal---and our levels of activity have picked up significantly," says Wolf.
Indeed, many dealers have found themselves searching for the 'new normal,' with some offering new deals or shifting to mostly on-line sales. With new car factories shuttered for weeks, competition among dealers for used cars has been strong. "It's very difficult right now (for dealers) to buy cars," says Wolf. "But the market is actually pretty doggone strong right now for the right used cars."
By the 'right' used cars, Wolf means something in between a luxury model and a beater. "I think the high-end sector was hurt, and junk is junk...so, I would say anything between $15,000 to $35,000-40,000 is pretty strong right now," he says.
The low prices aren't likely to last long, with new car production at most major automakers set to resume next week, and demand starting to pick up again. But for now, sellers are looking to move product. "The dealers are making deals, the manufacturers are making deals, and the banks are making deals," says Wolf. "So I would say it's the best time to buy a car that I've seen in a long time."