When will used car prices drop? We asked local car dealerships … | Business

Sage Radachowsky recently traveled with his wife and children from their home in New Marlborough to Hoosick Falls, NY—a round-trip of about 130 miles—to purchase a used 2008 pickup truck for $5,000 at a private sale.

Used car prices closer to his home in Berkshire County didn't fit his budget, said Radachowsky, a carpenter.

He's been driving a run-down Prius for two years and doesn't expect to get more than $150 for it at the junkyard.

“Truck prices have risen sharply since the pandemic,” he said.

He is not the only one who has felt the impact of high used car prices in recent years.

The shortage of new cars on the market in the wake of the pandemic caused more consumers to turn to the used car market, resulting in rapid price increases.

“Used car prices skyrocketed, so two-year-old cars were selling for almost the same money people paid two years ago,” said George Haddad, president and CEO of Haddad Auto Group, which owns three auto franchises in Berkshire County.

Supply chain delays during the pandemic affected both new and used car prices, but hit the used car market particularly hard.

“While [a customer] might have paid more for a new car, but they got significantly more for their used car,” said Haddad.

The increased demand for used cars also meant that people who traded in their used cars got more for their vehicle than they expected.

One of Haddad's clients, who owned a two-year-old Hyundai Palisade, traded in his car for the latest model. He got $8,000 more than he owed on his car, allowing him to maintain his monthly payment on his new car.

Used car prices remain high. That's good for those who want to sell or trade in their used car. But bad for people like Radachowsky who want to buy a used car.

The used car market won't cool down until the current supply of new cars catches up with the used car market. That will take three years, according to Jim Salvie, owner of Berkshire Mazda. In the meantime, used cars are still in short supply at most dealerships.

“It's very difficult for us to keep three-year-old used cars in our inventory because customer demand for them is there,” says Gary Johnson, president of Johnson Dealerships of Pittsfield.