Inflation concerns are rising, and talks of a possible recession loom over the economy. Amidst this uncertainty, real estate investors are actively purchasing properties, but what about the automotive sector? Many anticipate a crash in car prices, yet dealers seem to hold a different perspective.

Examining a Specific Case:
Let’s delve into a specific example from a local dealer’s used car inventory: a 2020 pre-owned Chrysler hybrid van. This minivan, with 18,000 miles on it, is listed at $49,000. But is this price justified?

Comparing to the Original Price:
A glance at the original window sticker reveals that this same vehicle, when brand new, sold for $49,330. Surprisingly, even with some added shipping fees, the used car’s price remains close to its original cost. This raises questions about the dynamics of the current used car market.

Dealer’s Pricing Strategy:
Dealers, it seems, are not pricing cars to sit unsold. Rather, they aim for figures that offer a reasonable chance of a sale. Despite prevailing economic uncertainties, dealers like this one aren’t shying away from setting relatively high prices for used vehicles.

Market Insights:
As of mid-to-late July 2022, dealers continue to operate with confidence in the used car market. They price used cars based on their original new car value, indicating a lack of panic despite broader economic concerns.

Potential Reasons for Confidence:
One possible explanation for dealers’ confidence is the anticipation of limited new car inventory. If new cars were readily available, dealers might not risk such pricing strategies with used vehicles. This insight suggests a deeper understanding of market dynamics than meets the eye.

The current state of the used car market reflects a complex interplay of economic factors and industry insights. While some anticipate a downturn in prices, dealers’ actions suggest otherwise. Perhaps there’s more to the story than meets the eye, hinting at a prolonged period of high demand for used cars amidst uncertain times in the automotive industry.