Used car shoppers have yet another competitor, and it’s one that you may not have seen coming.
Marketplace reports that before used cars can even reach dealer lots, big rental car companies are snapping them up at auctions where dealers compete against one another. This marks a major reversal from this time last year, when rental car firms such as Hertz, Budget, and Enterprise were shedding their inventories when demand tanked as a result of coronavirus travel restrictions.
Now, with vaccines in arms and demand for travel on the rise, those rental car companies are stocking up again. Just like consumers, though, rental car companies are struggling to buy new cars. A severe shortage of semiconductors largely produced in Asia has prompted carmakers to halt production, and similar delays are now being reported from firms that supply other car parts such as seat foams and plastic trim materials.
Dealers are already seeing lean new car inventories as a result of the production stoppages.
That domino effect has hit used cars, too. Values are up substantially as consumers who can’t find new cars have shifted toward used vehicles.
Zo Rahim, an analyst with Autotrader parent Cox Automotive, pointed out to Marketplace that daily car rental rates have increased considerably, too. Find a used car for sale