More San Francisco North Bay buyers opt for used vehicles in 2020
In an era of tech-driven cars and jacked-up trucks, used vehicles are having their day.
A study in Edmunds.com showed that 1.2 million used cars and trucks were sold in the United States in June, a rise of 22% from 2019 that North Bay automobile dealerships have also contributed to.
“It’s the biggest seller of the pandemic. All the data we analyzed show a combination of factors driven by the demographics of the used car market,” said Talia James, spokeswoman for the online automotive industry analytics firm based in Los Angeles. “Unfortunately, the demand is causing the prices to go up.”
It’s the simple law of supply and demand. Demand goes up, inventory goes down, and prices rise.
James also found another trend: Used cars also retain their value, while not depreciating as quickly as their new counterparts.
“People are being more financially responsible and price conscious,” James said.
When comparing California and the nation from month to month, prices have shown a steady rise on all models up to 15 years old in 2020. In Edmunds.com most recent state data, California’s average transaction price in April was $22,864. This is about $500 more than it was at the beginning of the year. The national average in April was $21,239, an $800 uptick from January.
There are a number of reasons for used cars as a hot commodity.
“Thanks to a shortage of new vehicle inventory, more automakers and dealers have leaned into promoting attractive certified pre-owned programs, which might be driving more typical new car shoppers into the used market,” said Jessica Caldwell, Edmunds.com’s executive director of insights.
Some North Bay sales departments cite the low inventory of new cars, as automakers either pulled back on their deliveries when dealerships were shut down or they got behind on production when a few of the plants retooled to make ventilators.
Another reason has to do with spouses investing in a second car instead of opting for mass transit. Their households have also seen more disposable income flowing through them, as people spend less not going out.
“With people with higher incomes, they have excess funds,” said Lucas Wurz, the sales manager for Jimmy Vassar Toyota and Chevrolet in Napa. “And due to COVID-19, a lot of people on assistance could be making more (than they did on the job).”
Those who feel insecure about their finances are also saving more money with a rainy day fund.
Preston Lindner, the online manager for Silviera Chevrolet in Sonoma, believes the lack of new car inventory is the driving force behind the used-car market.
“If they can’t find it new, they’re looking at used,” he said. “It’s probably a combination of everything.”
And the tech-driven world has probably helped consumers find the vehicles they want on line before they go to the dealerships.
“They often already know what they want,” Lindner added.
Corinne Galarza, the CarMax Santa Rosa general manager, has noticed people once opting for public transit coming in for a vehicle in the auto-buying platform that includes contactless curbside pickup.
“We are seeing customers buying cars who previously used public transportation or ride-sharing services and are now looking to buy a car for the first time,” she said.
Galarza cited one common denominator with recent used car purchases — buyers seeking “reliable transportation that fits their needs and budget.” This does not mean used has to mean old or even clunky.
Regardless of how and why people are buying, Marin County Ford salesman Glenn Ross mentioned his dealership has also noticed a greater growth in new car sales.
“I’ve never seen such a surge in new — especially in the truck market,” he said.
Ross points to auto enthusiasts needing a big hauler for all the campers people are buying — another result of the coronavirus outbreak.
The salesman said it helps when you have incentive financing with loans as long as 84 months.
Susan Wood covers law, cannabis, production, as well as banking and finance. For 25 years, Susan has worked for a variety of publications including the North County Times in San Diego County, the Tahoe Daily Tribune and Lake Tahoe News. She graduated from Fullerton College. Reach her at 530-545-8662 or email@example.com.