An average used vehicle costs around 35 percent more now than at the beginning of this year. Trends in the global automotive market during the COVID period show it’s not the best time for buying a car, but a very good time, maybe even the best, for selling, especially used cars.
The average used vehicle is sold for more than $27,569 at the end of November (+13% over last year), according to Kelley Blue Book and other sources. The average price in the used car market reached almost $26,000 at the end of summer, as we previously reported.
In a word, used car prices are sky-high. Since spring 2021, new car prices have risen to record highs too, though not so fast as used vehicles. By the end of last month, the average new car price exceeded $46,300: it is nearly $5,400 more than a year ago.
What is behind all of this?
A global microchip shortage has affected the automotive industry: paused or slowed the building of new cars, and made dealers lack new vehicles for sale.
Car manufacturers began to use the limited supply of microchips for the production of those models that bring more money. That means affordable offerings are the hardest to find today. This also applies to the used car market. For example, used older vehicles priced below $10,000 are in the shortest supply today, and the cars whose price is over $25K are most accessible.
Some experts believe this situation may go on next year. Nevertheless, only 16 percent of new vehicle purchasers are ready to wait for prices to go down. People always have transportation needs, and presently they prefer to drive their own car more than before due to the coronavirus pandemic.
Interestingly, American shoppers are searching for more expensive new vehicles: luxury cars made up 17.4 percent of total sales in November 2021 (the usual figure is 15 percent), with the record average price tag of $61,455 for a new car.
In general, we can draw the following conclusion:
- If somebody wants to buy a new or used vehicle, he/she should be prepared for the higher prices
- The next car today’s customer purchases is likely to last a long time, as modern vehicles suffer fewer problems, and they are of significantly better quality than the older ones. This is a nice consolation prize against high prices…