The new trend that brings in a lot of money is car flipping.
Dennis Wang bought a brand new Tesla five months ago. But the offer he recently got from a dealer was too good to pass up: $101,000. Wang paid $87,000 for his new Tesla in March.
“Absolutely insane! Mind-blowing!” said Wang.
Eddie Gribust knocked over his Tesla for $5,000 more than he paid for it.
“In the last two years I’ve driven brand new cars and I haven’t lost a cent,” he said.
According to Edmunds.com, cars typically lose more than 20% of their value in the first year on the road. But since the pandemic began, used car prices have actually increased by 53%, according to the Bureau of Labor Statistics.
“Even basic vehicles like a Honda Civic or a Toyota Camry, these vehicles are worth more in the used market than in the new market,” said Ivan Drury, senior manager of Insights at auto retailer website Edmunds.
Drury said there aren’t enough new cars, so buyers are turning to used cars, “essentially raising the ceiling on what used cars cost.”
“It will be shock and awe!” he said of those trying to buy a basic car. “You’re pretty much guaranteed to pay more and get less at any price.”
But some automakers are starting to crack down. General Motors warns buyers that warranties on its popular vehicles will disappear if those cars are turned over within the first 12 months. Tesla said it can “unilaterally cancel any order that we believe was made for resale purposes.”
That’s exactly what happened to Wang.
“Unfortunately, my order for Tesla has actually been deleted,” Wang said.
In this economy it is a good idea to check the value of your car 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 with the dealer or you can sell it and turn that equity into cash.