Japan earthquake, gas prices affecting car sales

4:27 PM, Apr 2, 2011   |    comments
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  • Japan earthquake, gas prices affecting car sales
  • Japan earthquake, gas prices affecting car sales

GOLDEN VALLEY, Minn. -- As gas prices climb higher, the demand for more fuel efficient cars continues to grow.

That, combined with a looming shortage of cars because of the earthquake in Japan, is forcing prices on new and used vehicles to go up.

"It's hard to keep used cars in stock. The ability to fill orders is more challenge than it used to be," said Ric Fohrman with AutoLuxe.

More demand than supply sounds like it should be a money-maker, but in the used car game, more cars means more money.

"We really want our old customers to trade in their cars," Fohrman said. "When people have a car to trade in, they're delighted to hear what their trade in is worth."

There are a few different reasons for the lack of new and used cars available right now.

"There's been a cut back in making new cars since the recession, and the price of the commodities for car parts has been going up world wide as well," said David Vang, the finance chair at the University of St. Thomas.

According to the NADA, wholesale prices on compact cars jumped 11 percent in the last three weeks. For mid-sized cars, prices are up 8.5 percent and Japanese imports could go even higher as supply is limited.

And of course rising gas prices also play a role.

"I think the typical used car dealer is going to find fuel efficient cars leave the lot very, very rapidly. And the larger cars, they may have to hang onto longer, or start offering more discounts," Vang said.

Yet another theory for the lack of used cars: Americans may be driving their cars longer, which may be necessary as Toyota and Nissan announced this week they don't expect to get back to full production in Japan until the middle of April.

(Copyright 2011 KARE. All rights reserved)

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