Used car prices are at an all-time high. The average price is sitting at a whopping $28,000 – and it doesn’t look like it’ll be going down. If you’re in a hard spot or willing to pay those prices, good luck even finding a dealership that has inventory on the lot. Pre-pandemic, a used car might sit on the lot for a month or two before it sells. During these times, you’ll have to act a lot faster. Cars are reportedly moving off the lots in about a week.
Data from Carfax shows that the prices of used cars are up 40% from this same time last year. As if that price point and percentage isn’t eye-watering enough, other companies are finding higher numbers. According to Edmunds, used car prices are up by 30%. If you want to talk cash, that’s an average price of $29,594. “Historically you’d think of that as the cost of a new car,” said Emilie Voss, director of public relations at Carfax. “We’ve never seen a number like that for average price for a used car nationally.” So, consumers are expected to pay almost $30,000 for a used car. Why the price hike?
Just Like Everything Else, Used Car Prices Are Being Impacted By Supply Shortages
There are a couple of different reasons used car prices are increasing. Overall, there just aren’t cars available to sell, used or otherwise. “We’re seeing record prices and part of that is a severe lack of used car inventory,” Voss added. “What we hear about with the car chip shortage impacting production, that is trickling down to used cars.”
Of course, the underlying cause is once again due to supply chain issues. There’s been a car chip shortage going on for months. The shortage has affected automaker titans like Ford and GM, and the effects are beginning to show up in the used car market.
Hopefully, this car drought will end soon. “There are headwinds right now,” Voss told ABC News. “New car supply is projected to get better in the second half of the year and consumer demand has slowed recently due to the recent COVID spike and high used car prices.”
No Chips, No Cars, No Features
As if low car availability isn’t bad enough, the cars that are there might not be the best. Due to low inventory, consumers will most likely have to lower their expectations and compromise on their ‘want’ list. This isn’t just exclusive to used cars, though. Chips are used for many different things in cars. Namely, all of the fancy features that can make a car feel luxurious.
Since automakers don’t have the chips needed to finish their cars, they’re doing something else with these unfinished models. They’re rolling them out as special editions of their cars. Rather than have inventory sit in storage waiting to be finished, they’re selling them with the bare minimum included. This appeals to some people, but if you’re looking for the extra features, you might want to wait.