According to a report by CNN Business, used car prices may finally have reached their highest point.

Earlier this year, used car prices increased sharply — rising 30% between March and June, the highest three-month increase the U.S. has seen according to government data going back about 70 years. According to NewsNation, prices rose as high as 43.0% in Alaska, with an overall average of 32.7%.

On the other hand, reports so far indicate the summertime saw a slowdown in price increases — up only 0.2% in July. Wholesale prices for used cars are also falling, which should eventually be reflected in final price tags.

Despite the hike in prices, demand is still high for used cars, but if the gap between new and used prices gets any narrower, consumers will likely prefer to buy new over used, even if they need to wait. Keep reading to learn more about the price hike and for some ideas on how to keep used car sales up during these times.

What caused the price hike?

The explanation is as simple as the law of supply and demand: inventory constraints and increased demand for used vehicles since the pandemic. With the computer chip shortage, rental car companies are holding onto their vehicles longer, reducing the number of used cars sold at auction by 26% compared to 2019.

On top of that, used car inventory has been limited by the fact that car buyers have been forced to purchase used rather than new vehicles. Stimulus checks also increased the pool of buyers of used cars as well.

How to Boost Used Car Sales During the Used-Car Price Hikes

With final stimulus checks already distributed and used car prices at their highest, dealers should be prepared for a slowdown in used car sales. Here are a few tips for driving more sales during this time:

• Increase your internet sales team: Make sure you have associates ready to fire off fast responses to online shoppers’ questions and quote requests.
• Add an online retail experience: Online car buying has become the preferred way for consumers to shop for cars since the start of the pandemic
• Enhance your mobile experience: Car shoppers are increasingly using their phones to shop around and purchase cars. Implement design enhancements to ensure your mobile site doesn’t send traffic away.
• Get active on social media: Social media activity is up since the pandemic, so make sure you’re getting in front of prospective car buyers through this channel.
• Add video content: Without a limited ability to see and test-drive cars in person, more and more consumers are turning to video to learn about vehicles they’re interested in. Don’t miss this opportunity to drive traffic to your website and connect with prospective buyers with engaging, helpful videos.

Used car prices will likely not go back to 2019 prices, but they should drop off toward the end of 2021. In the meantime, there’s plenty of things dealers can do to keep sales going through these unprecedented times.