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Used Car Market Struggles to Meet Demand
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The used car market today in Columbus is not the place to find a bargain. Consumers on a budget are realizing a car with luxuries like power windows and leather seats may be beyond their reach. Lynne Lennington from Groveport is test driving a Volkswagen with a diesel engine at the Columbus Car Company on North High Street near Weber Road. She says there are not many options in her price range.
“The next least-expensive diesel that I saw was almost $6,000 for a car that I think is maybe the same year as the one I’m looking at here, had less miles, but it rattled, shook and shimmied, and I could tell it hadn’t been maintained,” Lennington said.
Lennington has spent two months looking for a second car and until today she says hasn’t had much luck. There’s a shortage of cars on the market priced at less than $5,000. Lennington guesses the Cash for Clunkers program is to blame. Nearly 700,000 cars were destroyed to try to jump start the production of new ones.
“I feel sorry for anyone looking for anything $2,500 or under because now you’re looking at a real heap of poo because most of those got turned in,” Lennington said.
Many of the used cars at dealerships in Central Ohio come from the Groveport Auto Auction. Every Wednesday hundreds of dealership owners and salesmen come in search of cars for their inventory. Keith Whann is the CEO of the auction. He says two years ago the auction showed more than 3,000 cars a week, but lately that number is down to 2,000. Whann confirms the Cash for Clunkers program is one reason supply’s down, but it also has a lot to do with the production and sale of new cars.
“When you think about the fact that there are a number of millions of less transactions taking place on the new car side and traditionally roughly 60 percent of those generate a trade-in, there’s a vast number of used cars that aren’t being traded-in to dealers. And when you combine almost seven-hundred thousand cars leaving the road, there’s a real shortage of used cars,” Whann said.
College Car Company manager Mike Hinterschied watched as Lennington negotiated the sale of the Volkswagen. He says the demand for affordable cars hasn’t changed, but the supply has forced prices up. The average sale price for cars at his dealership has increased from five to $6,000 to nine to $10,000- and the higher price may not mean a better car.
“I can perceive a difference in the quality between what I can sell for under $6,000, and what I used to sell for six. I think it’s less for your dollar right now.”
Hinterschied says he expects it will be some time before the automotive industry is thriving again. This, for consumers, means fewer options and higher prices. Lennington knows. She did buy the Jetta and says it was a good deal in a tough market.
“It’s manual windows, no sunroof, it’s a stick-shift, you know, but it has air conditioning, it has heat, and it has a stereo I’m happy,” she said.