Used car sales spike as students seek bargain transportation

“Business has been great for me in spite of COVID-19,” said the owner of Hessville Auto Sales.

Kevin Hutt said he cannot keep cars on his lot, located just 1.3 miles from the Hammond campus and often frequented by car-shopping PNW students.

“It’s been great,” he said. “I have customers coming in all the time looking for cars.” 

The dealership is especially popular with international PNW students looking for a car on the cheap.

Hutt’s situation mirrors that of hundreds of thousands of used car dealerships across the country. People who have tightened budgets because of COVID-19 are buying used vehicles instead of new cars, driving demand higher and making it hard to maintain inventory. 

“I’ve called around different auction sites and they tell me they can’t restock their inventories fast enough,” said Hutt. “One minute a car will be listed in stock and the next it is gone. My lot before the pandemic held 36 cars on average. Right now, I only have 12.

“I get many international students from the dorms stopping by to make a purchase,” he said. “In general, they are looking for cheap prices and they are referred via word-of-mouth from local students.” 

Students are feeling the economic impact of high demand for used cars.

“As someone who has never had a car before, I need something that is cheap,” said Viviana Plaza, a Political Science major. “My limit is $7,000 before taxes and I cannot go any higher than that.” 

Plaza has relied on online sites like CarGurus, Autotrader, and Truecar to aid her search.

“I’m looking for something newer than 2010 with all wheel drive and an automatic transmission,” she said. “Something that can handle the Midwestern winters to get me around town.”

The used car trend has caught economists’ attention.

“It is important for people to understand the economic factors behind this trend,” said Dr. Amlan Mitra, professor of Business Economics. “First, the pandemic has influenced the car manufacturers’ ability to produce new vehicles. Workers cannot work in plants effectively thanks to social distancing guidelines.

“Second, there are going to be more used cars on the lower end of the market available,” he said. “There will always be a used car for sale during the pandemic, [no matter] how quickly listings disappear from lots.”

But that doesn’t mean car-shopping students should take anything for granted.

“Any students looking for used cars will have to pounce at every opportunity,” Mitra said. “Dealers are selling them quickly.”