TEMPE, AZ (3TV/CBS 5) -- What do people typically do during Memorial day weekend? While lots of folks head to the lake, many others hit Memorial Day weekend sales. Well, one of the things flying off the shelves, so to speak, is used cars. Business is booming!
Almost half of all car shoppers -- 43% -- plan to buy this Memorial Day weekend, according to Cars.com, and 51% are willing to pay more for the car they want. Now, that's probably music to a dealership's ears. According to this survey, most buyers are looking at new cars. Just 24% are in the market for a used vehicle.
- New: 61%
- Used: 24%
- Certified pre-owned: 8%
- Undecided: 8%
When you look at what people are buying -- gas versus hybrid -- it's a pretty even split. So, it seems the electric vehicles are gaining speed.
- Gas: 45%
- Hybrid: 44%
The increase in car buying started last year, with a lack of new cars from auto plants due to COVID-19, along with consumers being cautious about spending on big ticket items. This combination, some experts believe, is what drove the market. Even now, it's still being called "red hot."
The increase in sales is being called one of the hottest coronavirus markets for consumers. If you're in the market for a new or used car, how do you navigate it? We picked the brains of the car experts at Auto House in Tempe, one of the Valley's newest car showrooms, getting some words of wisdom from Jon Parske. He's the general manager, a luxury car professional, and the man behind The Collection of Scottsdale.
Auto House is a local family-owned and operated car dealership that prides itself on being a bit different from traditional dealerships. It gets customers in and out in one hour on average. It's newly-opened 100,000-square-foot building in Tempe is temperature-controlled, and can hold up to 250 cars, making it the largest showroom in the U.S.
Q: How and why is the used car market booming?
A: New car production has been affected by the pandemic, creating supply constraints, which has pushed a lot of demand to pre-owned vehicles instead of new.
Q: What are some of the top sellers Auto House is seeing and why? And, are there specific car brands people want right now?
A: Ultimately, the supply constraints are affecting all manufacturers, so all vehicles are in demand. Vehicles built out of the country are even more in demand due to the pandemic shutdowns that have trickled down, affecting the supply chain at all levels.
Q: What should people know right now about buying or selling a car?
A: Because of the constraints on the supply side, your car is worth more right now than ever before, so it's a great time to sell. If you lease, your residual value might even be high enough to exit your lease early. Our team of experts can evaluate your car and let you know what options you have for either selling it, exiting your lease, or trading it in. If you're in the market to buy a car, take a look at the inventory. [For instance] we have around 600 cars in inventory across three indoor locations, so we probably have what you're looking for. And even if we don't have it in stock, we can find it for you.
Q: How can you get the best deal in this type of booming market?
A: Working with someone you trust is key. Look for relationship-based -- not transaction-based -- dealerships who care about clients and will always do right by them, even during a crazy market like this one.
Q: Is the luxury car market also seeing an increase in sales, and if so, how?
A: Yes, and luxury vehicles built out of the country are in even more demand due to the pandemic shutdowns.
Q: What's your advice for those selling a used car or buying a used car?
A: Work with someone you trust. And do your research. There are all sorts of online tools that help empower today's consumer. If you're selling your car and want to avoid the hassle, at Auto House, we will issue you a check right on the spot. You won't have to wait 10 business days like you do at other dealerships.
Q: Should people wait to buy until it cools down?
A: Even though demand is high and there is a lack of supply, the timing of buying a car right now can be positive if you work with the right team. Not only do you benefit from getting a higher value for your trade, but when you work with a team you trust, you're getting the best purchase price possible. All market indicators suggest supply constraints will be our "new normal" for the foreseeable future, so it's better to buy now while you can benefit from getting a much higher value for your trade.