Making the most of car buyback offers
HOUSTON - More car owners say car dealers are offering to buy back their cars, as dealers are desperately trying to replenish low inventory.
Here's a look at how to determine whether it's a good time to sell your car and how to get the best price.
It used to be as soon as you drove a car off the lot, it depreciated and kept going down. Right now, dealers say in some cases, it's actually going up.
"For example, if you have a vehicle on day one, it might be worth $10,000. Day 30, a month later it might have appreciated by 5 or more percent," said Grant Feek, CEO of Tred.com.
Feek says the demand is so high, more car dealers are offering to buy cars back.
"It might be a two or three or four-year-old sale of a vehicle, where a dealer is going to call and offer a lot of money for a used car," he explained.
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Feek says he's even heard of some cases where dealers offer to buy cars back just a few weeks after selling them.
"Because the dealer has the capability to resell it to a new buyer and to still make a profit again on the same vehicle," said Feek.
You may not want to jump at your first buy-back offer. Compare offers by calling different dealerships or use an online selling platform to find your best offer.
Tred.com, for example, lists cars across a network of car-buying sites.
"You get the value of the private market because you're transacting directly with your buyer," said Feek.
CarGurus.com just launched a new feature, offering sellers an "Instant Max Cash Offer," based on offers from car dealerships.
"That will show them the top offer from our network of thousands of dealers and were able to do that instantly," explained Lisa Iannucci with CarGurus.com.
Both platforms say they will even pick up the car at a place you designate, such as your home.
As prices have been accelerating, is now really a good time to buy and sell a car?
Many experts say yes because the U.S. Bureau of Labor Statistics' Consumer Price Index shows that while new car prices are up about 6% over this time last year, used car prices are up 45%.
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Several car selling platforms can help you check if a new car price is the fair market value before you buy.
"CarGurus has what's called Instant Market Value, which helps consumers understand whether the query they're looking at is a great price, fair price, or a good deal," said Iannucci.
And if you lease a vehicle, you may be able to buy it out right now for less than buying a new car, if you can buy it for the residual value, the price set for the car at the end of the lease.