Bay Area used car dealerships see low inventory as prices continue to climb

By Kenny Choi

Increasing inventory continues to be a challenge for some used car dealerships.

“Normally, these spots would be filled, with a row of cars here and the garage packed,” said Omid Khalili of Marin Motors, a used car dealership in San Rafael.

Khalili has been selling cars for 17 years and says the numbers aren’t where they should be. His co-worker Don Davis is in his 47th year.  

“Every car sale is unique. It’s one of a kind,” said Davis. 

They both say the inventory at online auctions is relatively low.  

“It’s slim pickings. It’s not the same anymore. The inventory is not there,” said Khalili.  

The latest data from CARFAX shows that average used car prices have climbed to their highest point in 18 months to just under $25,000. 

That means shoppers are paying around $1,300 more for the average used vehicle than they would have just a year and a half ago. 

Car prices in the Bay Area are even higher. 

Brian Moody is Executive Editor at Kelley Blue Book Autotrader. 

“The San Francisco, Oakland, San Jose area at those prices being about 4.5% higher than the rest of similar-sized cities across the country,” said Moody. 

“On a list of 50, the San Francisco Bay Area is about number nine in terms of higher-than-average prices for used cars,” said Moody. 

The ripple effects of reduced new-car sales during the pandemic mean there are fewer used cars today, according to CARFAX.  

That means it could be a good time to sell, especially if you have an extra car.  

“Any dealership would be happy to take a car that someone’s looking to sell. Bring it to a dealership,” said Khalili. 

Industry experts say typically, a three-year-old car loses about 40% of its value. 

Analysts at CARFAX say the price gap between new and used cars right now is “unusually narrow” for some models and that buying new could be the better option.

Khalili and Davis just sold this 2019 Mercedes-Benz.

“I think it’s great. Hopefully it fits me well,” said one customer at Marin Motors. 

However, the numbers fluctuate, they say they’re focused on making their customers feel whole when leaving the lot.  

“If you’re not having fun and you’re not enjoying it and the people that are selling in the car aren’t feeling like they’re with you, don’t spend your hard-earned money there,” said Khalili. 

They’ve been in the used car business long enough to navigate the ups and downs of the market.  

Industry insiders say don’t assume “used” is cheaper right now. 

If a new car’s price is close to the older model, consider the value of fewer miles, newer features, full factory warranties, interest rates, and lower maintenance costs.