Used Car Prices Could Exceed 30K This Year
The average price of a used car is now over $29,000 — a 39% increase in just 12 months, according to data from Edmunds.com. The online resource for automotive inventory and information also expects prices to exceed $30,000 this year for the first time ever.
On top of that, more than half of American households have less income than is considered necessary to buy an average-priced used car, ABC News noted.
This increase comes with the sharpest inflation jump in nearly 40 years, 6.8% from November 2020 to November 2021, according to the Consumer Price Index. ABC News added that while the biggest factor was energy, used car and truck prices followed behind. The rate of increase is slowing; however, experts say that vehicle prices are unlikely to ease in the immediate future.
This increase began at the onset of the pandemic when auto plants stopped production to help slow the spread of the virus. As fewer people bought new and used vehicles, semiconductor makers switched from vehicles, which depend on these chips for a variety of functions, to consumer electronics. As the economy quickly recovered, supply couldn’t keep up with demand.
Because of rising prices, the New York Times reported that some consumers are fixing up older vehicles and keeping them longer. In addition, more cars that have been damaged in accidents and deemed a complete loss by insurers are now getting fixed to go back out on the road.
“Consumers who are planning on making a vehicle purchase in 2022 must prepare for a much different market and car shopping experience compared to years past,” said Ivan Drury, Edmunds’ senior manager of insights.
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