Why Are Used Cars So Expensive Right Now?
The average price of used cars has risen every month for the last few years. A slow, steady rise in pre-owned prices began around 2016. Then, it seemed to compound in 2020. The increase stems from a combination of pandemic-related market fluctuations and the supply and demand of parts for vehicle manufacturing.
Supply Chain Shortages
When the pandemic hit, supply chain shortages and workplace restrictions forced auto manufacturers to produce fewer new cars. This increased the cost and discouraged buyers from opting for newer vehicles. These factors, combined with higher unemployment and financial hardship, resulted in consumers gravitating toward used vehicles rather than new cars, truck and SUVs.
Many have opted to hang on to their older vehicle until used car prices go down, leading to fewer used cars being available for sale. This constrained supply of both new and used vehicles has led to higher prices on used cars for sale.
When COVID-19 hit, chip suppliers were forced to shut down their factories to protect the health of their employees. Once production resumed, the factories were overwhelmed by insurmountable chip orders from every industry and sector that uses chips in manufacturing. Automobile manufacturers are just one of many who have since been forced to cope with inadequate chip supplies. The chip shortage has pushed up prices for new cars, which further discouraged new car purchases, leading to an increase in the demand for and price of used vehicles.
Luckily, the effects of the pandemic appear to be temporary. As our lives return to normal, chip suppliers have begun to catch up with pent-up pandemic demand and supply chain conditions are improving across the board.
New Cars Are Also More Expensive
Advancing technology has also led to a rise in new car costs. Cars continue to get larger, increasing the amount of material used to make them. A fully loaded new vehicle is bound to cost more due to its higher-strength steel frame and fancier electrical systems.
Along with higher material costs, many countries have also opted to increase their vehicle emission standards. This has caused manufacturers to invest millions in research and development to follow and comply with changing regulations. The cost of new green technologies is ultimately borne by vehicle purchasers in the form of increased prices. This leads to a rise in the price of used cars as well.
When Is the Best Time to Buy a Used Car?
There is no “better” time to purchase a pre-owned vehicle. Whether you are trading in a vehicle, seeking financing, or looking to buy outright, purchasing or leasing a used car has never been easier!
When you buy from Easterns Automotive Group, you can expect an uncomplicated and stress-free buying process. We have an impressive used vehicle inventory that offers a wide selection of car options. Those benefits, along with our fair pricing and flexible financing options, means anytime is a good time to purchase a used vehicle from Easterns Automotive Group.
How Can Easterns Help with Rising Costs?
Price fluctuations in the auto industry don’t mean it is impossible to find a decently priced and reliable vehicle. All our inventory undergoes rigorous multi-point certification checks. This means you can buy with confidence knowing that you are purchasing a safe and dependable used car that shouldn’t require expensive repairs that make owning a pre-owned car more expensive.
At Easterns Automotive, we are proud to work with more than 30 lenders to increase the chance we can find a great auto loan for every car buyer, even those without perfect credit. This allows us to give our clients better options on rates and terms.
Plus, your car buying process is entirely customizable. You can shop online, in person or both. Our professional and experienced staff will guide you through the entire car-buying process.
If you are in the market for a certified pre-owned vehicle, we invite you to visit an Easterns lot in Baltimore or Washington, DC, or call today at 877-867-0641. Experience firsthand what we mean by the Easterns difference!