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Customers are out of luck as car prices soar and supply dwindles

Why to Buy a Car Now and How to Protect Your Investment
Posted at 8:23 AM, Feb 10, 2022
and last updated 2022-02-10 08:25:03-05

DUNEDIN, Fla. — For people who are looking to buy a vehicle, they are seeing quite the sticker shock. It's all because of the ongoing chip shortage and it's hitting the new and used car industry hard.

Doug Ramon is a salesman at Florida Auto Exchange in Dunedin and has been in the car industry for close to three decades. He said it's not just customers who are paying more. He said car dealerships have to pay more at auction as well.

"It has been a tremendous shift in how people buy and are looking at vehicles," Ramon said.

With such high demand for used vehicles this year, car lots like the one Ramon works at are now competing with major dealerships. He said that was never an issue in the past.

"There's a lot of used car buyers today. More than there ever has been," Ramon said.

Emilie Voss with CARFAX said everyone is seeing sticker shock when they look to buy used vehicles.

"The last two years especially we have seen a big impact on used car prices," Voss said.

According to Voss, used car prices have gone up by 40-percent in a year's time and that's both nationally and locally. An average used sedan in Florida will now cost around $28,000 dollars. For comparison, in January 2021 a sedan was about $8,000 less.

"It is so tied to the production issues that industry experts are saying it looks like the second half of the year we should see some relief in the chip shortage," Voss said.

Magen Aldana recently purchased a used car and like so many other people; she paid more than what it would have been worth just a year and a half ago.

She also helps people get into a vehicle that isn’t going to leave them cash strapped as a branch manager at Achieva Credit Union in Dunedin.

Her advice to those looking to buy a car is to take the emotion and excitement of wanting a new ride out of the equation.

"It's so easy to see something and want to jump and go grab it right then and there but just because it's the first thing you see doesn't mean it's the best thing," Aldana said. "We have people who come in on a daily basis looking to get lower rates. They come in sometimes with 20%, 25%. You know anything that they could have gotten into the car with and then they come in looking for help to get it lower."

Before making a big purchase both Aldana and Voss have a few recommendations to get the most bang for your buck.

They recommend a buyer fully understand the car's history, take it to an independent dealer for a thorough inspection, and take it for a test drive. Broadening your scope and options for a vehicle rather than wanting a specific color or make and model can also help in the search.

"If you're a little more flexible and you are open to an SUV or you know you want an SUV with a third row but you're not set on a specific color or make/model you will be able to maybe find a better deal on a vehicle," Voss said.

Aldana recommends checking with credit unions, banks, and all other financial entities to get the best rate and check every day as rates fluctuate on a daily basis.

For those like Ramon, he’s hoping just like the rest of the consumers looking for a new set of wheels, that used car prices go down.

"Some people are feeling that we're making a lot of money on that because the cars are more expensive which it's the opposite. We wish they were lower because the lower pricing everybody is a lot happier and we're making more money," Ramon said.