Low inventory is driving up values of used cars & trade-ins

Your Money Matters

SIOUX FALLS, S.D. (KELO) — Summer is always a busy season for car dealerships, but this year is unlike any other. Inventory is extremely low across the country, which is quickly driving up the value of vehicles.

“This all came about leaving the Honda lot when I walked into the lot and saw a brand-new SUV that I’m really looking at,” Karen Murphy said. 

Karen Murphy has been buying and trading cars at Verne Eide Honda in Sioux Falls for years.

“About 25 years at least,” she said. 

She is always on the lookout for her next ride.

“I just spotted this one blue pearl car and it just caught my eye like, the first baby I’d ever had and I have five children,” Murphy said. 

A beauty she was able to take home for a much better deal than expected.

“I didn’t realize what was ahead here with the good trade in market,” she said.  

“We saw an increase in Honda pilot values for instance, went up over $2,000 over two months for trade ins,” Verne Eide Honday Sales Manager Steve Eggebraaten said.

Trade in values are up across the board with used vehicles in demand as new car manufacturing continues to be delayed.

“We have the microchip problem is starting to get into some peoples inventories,” Eggebraaten said.

“A lot of the rental car companies aren’t able to get the new cars, so they’re actually buying late model used cars to put back in their rental fleets, so that’s driven the price up as well.”

But even after nearly six months of inventory issues, car dealerships are still incredibly busy.

“I think it’s pent up demand, we had 15 months of being pent up, so they’re doing things they didn’t do last year,” Eggebraaten said.

After 20 years in the car business, Verne Eide Honda Sales Manager Steve Eggebraaten says last month was the most fun he’s ever had on the job.

“We have a pretty good selection of used car inventory because we did have a record new car month last month so we took in a lot of great local trades,” Eggebraaten said.

“We’ve only put 11,000 miles on it,” Murphy said.

With locals like the Murphy’s adding even more highly-valued used inventory to the lot.

“Its a gem of a car,” Murphy said. 

Inventory has been such an issue that some dealerships are making cold calls or sending mailers to former clients, asking if they can buy back their vehicles right now, very similar to the kind of creative marketing real estate agents are doing to try and increase inventory.

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