MADISON, WI – “I can’t even begin to tell you how many times a week I’m asked when the used vehicle market will be back to ‘normal,’” says T.J. Johnson, the used vehicle acquisition manager for Smart Motors on Odana Road in Madison. “It’s impossible to say, but if by ‘normal’ they mean pre-COVID inventories and prices, the answer remains uncertain despite some recent improvement.”
Johnson says there are signs the market is moving in the right direction, but the momentum is extremely slow. He says at Smart Motors the demand for quality used vehicles remains extremely high, and as a result, he is constantly looking for and purchasing vehicles from local sellers to fill the void in the dealership’s used car division. Sedans and small to mid-sized SUVs, especially hybrids, he says, are more desirable at the current time because of higher fuel prices.
“Right now we’re averaging around 60 used vehicles on the lot at any given point,” he says. “And at the same time, we’ll end the month having sold 160-170 used cars. Vehicles turn that fast.”
Justin Jackson, General Sales Manager at Smart Motors says used vehicles do not stay on the lot very long, especially if they fall within certain criteria. “Used vehicles in the $10,000-$20,000 range with around 100,000 miles are in very high demand and are usually purchased in a matter of days.” He says presently a used vehicle lasts an average of nine days at Smart Motors before it is sold.
According to a Consumer Price Index report, a somewhat questionable silver lining has emerged over the past year, though. The price of a used vehicle has dropped by 3-5%. However, according to the report, “they are still priced about 50 percent higher than they were in February 2020, before pandemic-related disruptions catapulted the economy into turmoil. Quite simply, new-car shortages continue to put pressure on the used market.”
Johnson says there is actually another bright spot for consumers in this economy. Local market conditions remain strong for consumers looking to sell their vehicle. As local employers have either extended, or made permanent, work from home options available for their employees, many are choosing to outright sell their extra vehicle sitting in the garage and use the windfall of cash for needed essentials like groceries and rent or mortgage payments.
According to iSeeCars.com research panel, used cars in July 2022 were up an average of 10.9% over July 2021. Electric used car prices are up 56.7% while used hybrid prices jumped 30.5% amid a surge in gas prices. These increases are also reflected in an increase in how much a dealership is willing to pay potential sellers for their vehicles.
Smart Motors launched SmartBuysCars.com in 2021 so sellers could get an instant offer on their vehicle in less than three-minutes which is based on factors such as market demand for their vehicle, the number of vehicles like theirs available in the market and the considerations made to a vehicle’s sellable condition. Johnson says the page was updated in 2022 with a new video wherein he explains the quick, easy and transparent practices employed by Smart when purchasing a used vehicle.
Johnson says selling to a dealership is appealing to many local sellers vs trying to sell to a third party. Additionally at a dealership, a thorough inspection can be done and an offer made in usually less than an hour, while selling it privately may take weeks or even months.
“Making the process easy, fair and transparent is what sellers desire most,” according to Johnson.
In today’s tight automotive market, this is one way Smart Motors continues to strive to be proactive in meeting consumer demands.
