Nowadays, finding a used car or truck for a bargain price is almost impossible.
Second-hand car prices have skyrocketed since late last year and it is likely that prices will remain high for a while. In the past 12 months, used car prices have risen nearly 10% to mark the biggest increase in more than a decade, according to the US Consumer Price Index released on Tuesday.
How is that? It is a classic case of low supply and high demand.
The only thing is that there aren’t many used cars for sale. The pandemic forced rental companies to cut back on new car purchases after the number of individuals renting cars at airports and other locations plummeted. These vehicles are usually sold to lots of used cars after a year or less.
At the same time, the demand for used vehicles is increasing as more and more people avoid public transport or move from cities to suburbs to get rid of the coronavirus. Cox Automotive estimates that demand for used cars has doubled since last March.
Many Americans prefer used vehicles to save money during times of uncertainty, especially with prices of new cars and trucks always low. Earlier this year, the average cost of a new car surpassed for the first time at $ 40,000, automotive research firm Edmunds found.
The imbalance is unlikely to end anytime soon.
Major carmakers, for example, can’t find enough computer chips for new cars and General Motors
and others have had to delay or suspend some production activities. That will limit the number of used cars entering the used car market.
The shortage could not come at a worse time.
As the US economy accelerates and completely reopens, Americans are driving and flying in larger numbers and are more willing to buy or rent a car.
The recent federal fiscal stimulus, highlighted by a $ 1,400 check for most Americans, also gave customers more money to spend.
However, they should prepare for the shockproofing the sticker for the used car. Edmunds estimates the average cost of a used car or truck is now $ 20,000.