SOCASTEE, S.C. (WBTW) — Those shopping around for a used vehicle might notice a higher price tag.
New data reported by Edmunds.com shows the average price of a used vehicle surged nearly 14% over the last year.
Bill Garofalo said most of his days are spent finding inventory for his lot at Competition Cars off Highway 17 and Palmetto Pointe Boulevard. Used car supply dwindled during the height of the pandemic when new car production halted. Garofalo said the supply hasn’t gotten any better a year later.
Vehicles with low miles and a clean Carfax are now selling higher than their value at auctions across the country.
Garofalo said he can’t afford paying too much over value, because cars would be left sitting. Instead he’s focusing on quality and a fair price.
“That’s why I have half my inventory, because I’m very selective,” Garofalo said.
He said buying within his means helped the dealership make it through 2020. Still some customers will end up paying more depending on their credit score and loan. Some customers will have to pay a larger down payment to stay within their budget.
“We have banks that’ll give us 125% of the value of the car. There’s an extra 25% we have to play with, but again you don’t want to get too far over the book value, because if you run into that 25% that’s that much more money the customer has to come up with to the make up the difference,” Garofalo said.
Garofalo said he hopes the market’s bubble will pop soon when new car production increases.
“Then you’ll have the new car dealer’s money tied up in new cars and they won’t want to keep the used cars as much. Getting more inventory into the new car dealers will help them shuffle out some of the used cars and funnel them back to us and create a lower price at that point,” Garofalo said.