If you’ve gone shopping for a used car as of recently, you were probably surprised to see just how expensive they are. And it’s certainly NOT your imagination. Used car prices have skyrocketed over the past year, and it’s possible that we won’t see these prices go down for quite some time.
While some people are choosing to keep their current cars, others have no choice but to replace them. If you’re in this same boat, it’s important to understand modern car prices and tips for navigating this changing landscape.
What’s Causing the Price Increase for Used Cars?
You’ve likely heard about the chip shortage and how it has impacted new cars. This has had a trickle down effect, impacting the used car market as well.
Microchips are a necessary component for vehicles, and they’re slowing down production worldwide. With far less new car models to choose from, prices have skyrocketed. High dealer markups and a lack of options are forcing people to shop secondhand.
In other words, a whole new set of customers are shopping for used vehicles and willing to spend money, since they were going to spend it on a new model anyway. This, coupled with low inventory from people not trading in their vehicles, has driven up used car prices.
What are the Average Prices for a Used Car?
According to Edmunds, the average price of a used car in November 2021 was $29,011, a sharp increase of 21.4 percent from the same time in 2020. And, more than 2 million used car buyers are purchasing vastly overpriced used vehicles, which means people are putting up the cash.
However, when you compare that price to the average price of a new car – $47,000 according to Kelley Blue Book – it doesn’t sound too bad. The reality is that cars are expensive right now – new or old – and will continue to be so for a while.
When Can You Expect Prices to Decrease?
While no one knows the future, there are some predictions that will hopefully ease your mind. Business Insider predicts that by the end of 2022, prices of wholesale used vehicles will drop by 3 percent compared to the end of 2021.
However, expect these prices to gradually decrease rather than there being one big drop. It won’t be until supply chains are fixed and production recovers that supply and demand will begin to even out.
What if You Need a Car Now, But You’re on a Strict Budget?
If the used car market is out of reach for you, there’s another option: repossessed vehicles.
RepoFinder offers a free list of banks and credit unions that are selling used vehicles, often in good condition. You can save a lot by shopping for repo cars, trucks and SUVs, and you can get the vehicle right away.
Our inventory is always changing, so check back often if you don’t find what you’re looking for. Discover the many reasons why so many people are choosing to shop for repossessed cars instead of new or used ones – they’re accessible, easy to purchase and give you the most bang for your buck!