Why Are Used Cars So Expensive Right Now?
If you’ve been browsing the online ads and visiting the local dealership websites for your next sedan, truck, or SUV, you probably noticed a few trends. There are substantial incentives available among many of the automakers trying to move new vehicles. There are increasing numbers of dealers offering virtual car-buying experiences to promote safe transaction practices.
You may have also noticed that used cars, from the older models to newer, certified pre-owned models, are skyrocketing in price. There are a few reasons for these used car price hikes, and it may impact your car-buying decision in the end.
Just how more expensive are the used cars right now?
It’s not uncommon for used car prices to fluctuate under normal economic conditions. But over the past few months of community shutdowns, increased numbers of furloughed Americans, and a more conservative consumer confidence level, the used car market is proving to be incredibly volatile. Edmunds took a closer look at the data and suggested all used vehicle pricing increased by more than $700, to an average of $21,558. Edmunds also points out that this shift is a historical one, considering that this time of year usually decreases used car pricing.
Why some suggest the used vehicle pricing is skyrocketing
A few contributing factors are causing the used car market to see record price increases right now. For one, typical new-vehicle shoppers are considering used as a financially responsible purchase. Spending less right now, with current uncertainties about job security, is a smart move. There are tons of certified pre-owned incentives, making financing those near-new rides easier on the monthly payments.
Remember, there were a few months earlier this year when automakers stopped building new cars. As a result, many dealers are reporting shortages of new inventory, and are instead steering potential buyers to the used inventory. With all of this increased demand looking to buy used, economics dictates the prices to jump.
The car-buying incentives are still strong
The data shows that post-economic shutdowns, many consumers are now venturing out to trade in their cars. The deals are abundant, for new, used, and leasing options. Many consumers are focused on replacing their cars with low-interest, value-driven vehicles. The deals are getting sweeter for buyers, making now a perfect time to buy.
For example, Chevy is offering hefty cashback incentives on certain Silverado trucks. Others, like Subaru, are offering zero-percent financing for up to 63 months. Even the dealerships, at the local level, are doing what they can to close the deals, hungry to recover some of those sales lost earlier in the year.
So, should you buy new or used?
The car-buying market is a little crazy these days. And in the end, you’re ready to buy but want to make sure you’re taking advantage of the best deal. Just because the used car market shows unprecedented price hikes, it doesn’t mean a used car isn’t right for you. Whether you move forward with a new vehicle or strike a deal locally for a certified pre-owned, the good news is that you have plenty of options right now. And if you don’t find the perfect car you love, you don’t have long to wait for the new 2021 models to start landing on the lots.
Used car pricing is proving to have COVID-19 side effects as much as new inventory has. You might notice those used models feature heftier price tags today due to the increased numbers of consumers buying pre-owned. But a heftier price tag doesn’t mean you still can’t find a great deal on a used car.