Why are used car prices so high in 2021?
Used car prices have been on the rise due to the interruptions in the supply of new vehicles. Prices will remain high for the foreseeable future; what does it mean for you? AuXcar explains.
The unfortunate reality is that finding a good deal on a second-hand vehicle in today’s marketplace is not easy. As a driver, chances are you will have checked out the used car market over the past year and a half or so; you were likely shocked by unusually high prices.
Used car prices have risen 40% since February 2020, and it’s now much more commonplace for new vehicles to sell for considerably more than the Manufacturer’s Suggested Retail Price (MSRP). The current state of the market has been more than enough to put many buyers off. Choosing to wait out the steep prices until they fall again seems to be the best decision, more so if you are on the hunt for a good deal.
Economic instability
We can trace the drastic increase in vehicle prices back to the early stages of the pandemic. Economic instability arose due to COVID-19 issues forced new and used car prices to rise sharply. Global chip production fell and put an instant strain on the supply of a wide range of electronics including vehicles, computers, and appliances. In addition, sellers were less inclined to interact with buyers… or even leave the home!
Unfortunately, the chip shortage is likely to continue; a fact that could negatively impact the new car market for months, or even years, ahead. The dramatic shift has changed the way we should consider carrying out repair works on our vehicles. If you are already the owner of a roadworthy used car, you are better off holding on to it rather than expecting to find a better deal elsewhere. If you need breakdown assistance and repairs then it is better to invest in your used vehicle rather than replace it.
This concept applies to leasers as well. If your lease is soon coming to an end, then consider the option of buying out your vehicle in full. An agreed price is determined in the lease agreement. Buying a leased vehicle through an agreement set out from before the spike in used car prices could be a great way for a leaseholder to secure their vehicle at a price lower than the current market value.
If you simply cannot wait for the high prices to drop and are still hoping for a good deal then try seeking less popular brands, even consider some options you may not have previously. It is certainly not impossible to find a deal in a seller’s market; just prepare to put in the effort and do some real hunting. You never know, you could get lucky and find a bargain!
