The resale of new cars suddenly comes with an “absolutely crazy” profit
The new trend that is paying off big is car flipping.
Dennis Wang bought a brand new Tesla five months ago. But the offer he recently received from a dealership was too good to pass up – $101,000. Wang paid $87,000 for his new Tesla in March.
“Absolutely mad! Breathtaking ! Wang said.
Eddie Gribust returned his Tesla for $5,000 more than he paid for it.
“For the past two years I’ve driven new cars and haven’t lost a dime on them,” he said.
Typically, cars lose more than 20% of their value the first year on the road, according to Edmunds.com. But since the pandemic began, used car prices have actually risen 53%, according to the Bureau of Labor Statistics.
“Even basic vehicles like a Honda Civic or a Toyota Camry, these vehicles are worth more on the used market than on the new market,” said Ivan Drury, senior director of information at the shopping website. Edmunds cars.
Drury said there weren’t enough new cars for buyers to turn to used cars, “essentially raising the ceiling on the cost of used cars.”
“It’s going to be shock and awe!” he said of those trying to buy a basic used car. “You are virtually guaranteed at every price point to pay more and get less.”
But some automakers are starting to crack down. General Motors is warning buyers that warranties on its popular vehicles will expire if those cars are returned within the first 12 months. Tesla said it could “unilaterally cancel any orders we believe have been placed for resale.”
This is exactly what happened to Wang.
“Unfortunately, my order for Tesla was actually deleted,” Wang said.
In this economy, it’s a good idea to check your car’s value online, especially if you have a lease. It’s probably worth a lot more than you owe, which can give you a lot of bargaining power at the dealership or you can sell it and turn that equity into cash.