rental

How a perfect storm of shortages and rental car chaos sent used-car prices skyrocketing

Cars sit outside a used car dealership with spray paint on the windows advertising the vehicles.

Used car and truck dealers have bought models for more than their original sticker price. Jim Watson / AFP via Getty Images

  • Used-car prices have skyrocketed over the last year.

  • A supply crunch in new cars is spurring demand for used models.

  • Prices may not return to normal for at least a year, one expert told Insider.

  • See more stories on Insider’s business page.

If you’re looking to get a sweet deal on a used car to take advantage of the warm summer weather, it’s not going to happen.

The market for secondhand cars is absurdly and unprecedentedly hot right now. Used vehicles went for a whopping 40% more in June than they did before the pandemic in February of 2020, according to data from JPMorgan.

The average nine-year-old car changed hands for $13,250 in June, according to automotive research site Edmunds. That’s a 30% hike over the same

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Nissan Stands Out As Loser, Rental Cars Changing Market

The Morning ShiftAll your daily car news in one convenient place. Isn’t your time more important?

The car market these days is in a moment of demand outpacing supply, and rental car companies are not helping. All that and more in The Morning Shift for May 17, 2021.

1st Gear: Prices Up, Mileage Up

I’ve always been generally aware that rental car companies and fleets in general have an outsized influence on the American car market. Hell, I remember the Chevy Malibu Classic existing. You have to explain that somehow.

In any case, a new article from Automotive News lays out how rental car companies fit in with today’s car market struggling amidst a global semiconductor chip shortage. From Automotive News:

Major rental-car companies with their large fleets are known to buy when prices fall and sell when they rise. But instead of unloading their fleets to

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Rental Companies Buy Up Used Cars as Chip Crisis Get Worse

The semiconductor shortage has slashed vehicle production so much that rental-car companies can’t get the new cars they need, so they have resorted to buying used vehicles at auction.

This is uncharted territory for the likes of Hertz Global Holdings Inc. and Enterprise Holdings Inc., which have made their profits by purchasing new vehicles cheaply in bulk, renting them out for as much as a year and selling them at auction. In the past, they have bought some used cars to shore up an occasional unforeseen burst in demand, but rarely for the mainstays of their fleets.

“You would never go into auction to buy routine sedans and SUVs,” said Maryann Keller, an independent consultant who used to be on the board of Dollar Thrifty Automotive Group, which is now part of Hertz. “These are special circumstances. There is a shortage of cars.”

The demand is sending used-car costs

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Springfield car rental owners say pandemic has had impact on car availability

SPRINGFIELD, Mo. (KY3) – Rental car companies across the country are feeling the impact of the COVID-19 pandemic.

Joe Horton, owner of Rent-A-Wreck in Springfield, said he’s seen the impact first-hand. He said the boom in car rentals could be contributed to several reasons, however, he said it all leads back to the pandemic.

He explained that last year, companies sold off a large portion of their fleet because people weren’t traveling, so cars were sitting at airports and on lots.

With COVID-19 restrictions easing in areas across the country, including the Ozarks, Horton said travel is picking back up. He said people are looking to rent cars again, but there’s an ongoing chip shortage in the automotive industry, preventing companies from getting inventory.

“As the demand increases, they’re trying to pick up their inventory, and I’m in the same boat to a lesser degree,” explained Horton. “So we’re falling

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