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'It's like every car is a Ferrari right now' | Used car values soar amid inventory shortage

Dealerships are seeing an unprecedented value on used cars which has caused buyers to pay more for certain cars used than what those cars would usually cost new.

LOUISVILLE, Ky. — If you're in the market for a new car, now may not be the time to get a good deal.

Inventory is way down, which is "driving" up the price on existing cars on the lot. In fact, people are paying considerably more for certain cars used, than what those cars would usually cost brand new.

Our FOCUS team looked into this phenomena to understand how it's making many Kentuckians owe more to the state. 

With no haggle pricing or wide selection of new and used cars, this is uncharted territory for Neil Huffman Auto Group's Used Car Director Brian Ubelhart. 

"Wow, wow, that's all, wow," Ubelhart said as he pointed to a nearlu empty used car lot that he is accustomed to seeing full. "We'd be using an overflow lot from the mall across the street too as well, keeping anywhere from 30 to 60 cars over there too as well."

The cars basically selling themselves, Ubelhart says, no matter the miles. With the inventory shortage, used cars for sale are in high demand. 

"We need cars, bad," Ubelhart said. 

Above all others, two types vehicles remain particularly hot: trucks and SUVs. Which used could be worth up to 15%-20% more than last year.

Karl Bauer with ISeeCars.com, an online tool for searching used cars and finding the best deals, said almost all cars depreciate but the unseen trend right now is appreciation off the lot. 

"Something we've never seen before," Bauer said. "Never seen the across the board appreciation of used cars in the course of the year like this, this just doesn't happen. It's like every car is a Ferrari right now."

Much of the inventory shortage is due in part to the COVID-19 pandemic. As the world shut down momentarily, so did the manufacturing. 

It's an era when certain one to two year old used cars are selling for more than what that make and model would normally cost brand new.

"We're just seeing a real constriction in new car supply because of global chip shortage," Bauer said. 

That small, but essential car part caused the jam of new Ford pickups at the Kentucky Speedway, the supply chain here and elsewhere is stuck in park.

FOCUS decided to test this unseen used car appreciation with a six-year-old Toyota 4Runner. 

After an inspection by Ubelhart, he estimated that the car would be worth $34,000 if sold today. Even with 70,000 miles on the 2015 car and even though a year ago, it was worth somewhere around $28,000.

However, last year, Kentucky actually valued a 4Runner at $23,250.
That's based on car figures coming from the National Automobile Dealers Association.

Despite the wear and tear of another year and thousands of more miles on the road, the same SUV increased in value by $1500.

"If the car's value has gone up in the past year, your taxes have gone up too," Bauer said. "If you've got a car that you don't consider particularly unique or special, don't be surprised if you get a higher, annual tax or use bill from your state because the value of all the cars went up."

However even with this unseen value, current car owners should think about sitting in neutral if they are thinking of selling. 

"There's always a flip side to that, yeah, they could sell us their car, but they're going to need something else to drive," Ubelhart said. 

As far as Motax goes, drivers have up to 60 days to contest the value and property tax upon receipt of their bill. 

Despite the rise in values, the Jefferson County PVA said there hasn't yet been a spike in people contesting or questioning their bills.

Have a story tip? Contact the FOCUS Investigative team at FOCUS@whas11.com 

Contact reporter John Charlton at jcharlton@whas11.com. Follow him on Twitter (@JCharltonNews) and Facebook. 

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