Inventory on used car, truck and S.U.V. lots is down. Own-A-Car Fresno general manager Lance Rice said it's a negative trend that could drive up the cost of the ride for the consumer. "There's a limited supply of how many cars there are at auction to buy and how many dealers show up. There's way more dealers that show up than cars to buy. So it's more competitive bidding."
Nationally the average price for a used ride has increased $3,000 over the last five years according to one auto sales expert.
Rice is paying two to three thousand dollars more a car to fill up his lot. He said he's absorbing the cost and not transferring it to the customer yet. "We still find the niches on where we can get customers the good deals on certain cars."
Dealers like Rice said the decrease in used car inventory can be attributed to fewer cars coming off the assembly line. Also rental car businesses are holding on to their vehicles two to five thousand miles longer delaying their release on to the used car market.
Fresno State Marketing professor Dr. Bill Rice said car buyer psychology also plays a role. "What they consider a gratification index and the issue of value that they receive when they're not feeling that they're receiving that value then they're going to find some other location to be able to justify that in their gut."
Dr. Rice said a rough economy and recession has forced consumers to be smart with their dollar. "All those people are moving, they're hedging, they're moving their value index higher up in order to squeeze more out of the same dollar they're spending."
Marketing specialists and dealers predict higher used car prices could stick around for at least another year.