“My # 1 Portfolio Asset is a 2017 Hyundai Sonata Hybrid”: Some Americans Make Net Profits Selling Used Cars
The most valuable asset in Adam Sharkey’s wallet is not Bitcoin BTCUSD,
or Tesla TSLA,
stock, but rather its used Hyundai 267250 2017,
Sonata hybrid that has traveled over 32,000 miles.
At the start of this year, the car was worth nearly $ 12,700, according to data from Kelly Blue Book. Now its value has jumped to almost $ 18,600 – an increase of almost 50%, and more than half the price he originally paid for the vehicle he bought new in 2017. C It is also more than four times the growth rate of Sharkey’s 401 (k). the same period of time.
“Dude, the # 1 asset in my portfolio is a 2017 Hyundai Sonata Hybrid. What the hell is going on?”
Sharkey, 29, closely monitors the value of his investments, tracking them monthly on a Microsoft Excel MSFT,
spreadsheet. “For the last few months I’ve been like ‘Dude, the # 1 asset in my portfolio is a 2017 Hyundai Sonata Hybrid. What the hell is going on?’ Said Sharkey, who is based in McKinney, in. Texas.
“I would probably sell this thing if that didn’t mean I just had to turn around and buy another car,” Sharkey, who sells power tools to factories in the Dallas area, told MarketWatch.
Under normal circumstances, cars are virtually guaranteed to depreciate the second you take them out of a parking lot. But due to global shortages of microchips and increased demand for used cars, prices have hit record highs.
The average used vehicle cost an all-time high of $ 26,457 this month, according to Edmunds.com, a site that tracks car prices.
Used vehicle price increases accounted for a third of the sharp rise in inflation last month, according to the Labor Department. Prices climbed a record 10% in April and 7.3% in May, as inflation climbed 5%, the largest 12-month increase since 2008.
Some used cars are worth more than their original price
Lorenzo Galindo, 26, has been able to profit from the boom in the used car market.
Galindo, who is also based in the Dallas Fort Worth area, bought a 2018 Honda Accord Sport with 33,000 miles for $ 21,000 in March. He enjoyed driving the car, but found it difficult to drive with his two dogs – a German Shepherd / Golden Retriever mix and a Dutch Shepherd mix, weighing around 70 pounds each.
He read several articles on the record increase in used car prices, which prompted him to check whether the used car he had owned for about three months had also appreciated.
Lorenzo Galindo’s 2018 Honda Accord Sport was worth $ 4,500 more than he paid for. He sold it and paid four credit card bills.
To his surprise, it was worth around $ 4,500 After than he originally paid for. At first, he thought it would be too complicated to sell it, he told MarketWatch. But after consulting with his parents and girlfriend, he decided to sell the car for $ 25,500 to Shift, a peer-to-peer online car market.
“The consensus was to make a profit and move on to something that I would really like,” Galindo said. He then used the proceeds to pay off three of his four credit card bills for that month to reduce his credit card balance and apply for a loan for a new car at a lower interest rate. “Two birds one stone,” he said.
The third round of stimulus checks issued by President Biden likely helped boost demand for used vehicles.
Now he drives a 2021 Mazda 7261,
CX-5 he bought new for $ 37,000 including taxes and fees earlier this month. “It’s amazing how much used cars have enjoyed,” said Pat Ryan, CEO of CoPilot, an online car buying platform.
The third round of stimulus checks, which were handed out after President Biden signed a third stimulus package on March 11, likely played a role in boosting demand for used vehicles, Ryan told MarketWatch .
“We were already seeing a pretty vibrant used car market,” Ryan said. “Around mid-March, things just got higher. I can’t say this was caused [by stimulus checks] but it was incredibly closely correlated with the timing of stimulus checks. ”
Other Ways to Take Advantage of the Trending Used Car Market
What is your used car worth? Check out sites like Edmunds, Kelly Blue Book, CarMax KMX,
and CoPilot to see what your vehicle is worth. You may find that your car is worth more than you think.
Normally, you are more likely to make more money selling directly to a consumer than to a dealer. However, it takes a lot longer to coordinate a moment to meet and find an interested buyer, said Ryan, who clearly has a vested interest in people using services like CoPilot.
Ryan paints a grim picture of consumer-to-consumer agreements. “You will probably do as well as you would sell it to a consumer” and you won’t have to meet a stranger in a 7-Eleven parking lot “wondering if they are going to buy my car or if they are” you are going to rob me .
When selling a used car online, be prepared to negotiate and be patient when answering questions from a potential buyer.
However, Kelley Blue Book does offer advice for people who want to sell directly to a buyer, including being willing to negotiate and being patient when answering questions from a potential buyer. “If you’re selling a regular, slightly run-down 10-year-old commuter car, it’s hard to beat Craigslist. Registration is free, there is no after-sale fee and you can post lots of photos, ”according to the site.
“The downside is that searches on Craigslist are limited to a relatively narrow geographic area. Additionally, Craigslist seems to be a magnet for crooks and lunatics. Listing platforms like KBB.com and Autotrader.com have publicized the impending sell-off further and will most likely screen out scammers, ”the company said.
“For more unique and more valuable cars and trucks, eBay and Bring-a-Trailer – with their auction style ads, can be a good way to maximize your selling price,” he adds. .
Car owners should also consider refinancing their car loan, said Jon Salzberg, director of the automotive division at Credit Karma. As the value of used cars has appreciated, this creates a rare opportunity to potentially benefit from a better interest rate on a car loan.
Auto loan interest rates are usually calculated based on the value of your car, which should continue to depreciate, when you apply for the loan. But in many cases the opposite is happening now, so Salzberg says lenders may be able to offer you a better rate since your car may be worth more.
So, was it worth it? If the used car market weren’t so hot, said Galindo, “it wouldn’t be worth it for me to go through the car buying process and get more inquiries about my credit.” . But for a quick profit of $ 4,500, he added, it was a no-brainer.