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This Is One Possible Explanation for the Current Car Prices We Are Facing Today

New cars on the lot 8 photos
Photo: ACEA
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In case you have been living in a cave for a couple of years, you might not be aware that things are more expensive now than they used to be a few years ago. The problem is not just pre-pandemic and after, as you can see a yearly increase in the price of goods and services, and vehicles fit the bill accordingly.
Once you start to look at the figures, you begin to wonder what is going on. Sure, we have had a pandemic that slowed tourism, shipping, manufacturing, and various activities, and there were also other issues that affected shipping across the world.

Might we also mention the global chip crisis? Yes, that is still ongoing, and the same goes for the war in Ukraine, which has disrupted the production for a few companies, to say the least.

While all this is going on, the housing market in some countries has skyrocketed, just like it did up until the fall of 2008, while the price of construction materials has increased from one month to another.

In other words, it has become more expensive to build things than it used to be, and this trickles down to the customer. Meanwhile, banks are not as eager to hand out loans, and when they do, these loans have high-interest rates.

Some analysts have warned that the bubble might burst, but the used car market is not hearing it. In the case of people who are buying used cars with borrowed money, the scales have been tipped against them from the get-go, with more expensive used cars than ever before, as well as the most expensive loans that have been offered in years.

When the bubble pops, those people will be responsible for paying their installments on their cars that are not worth anywhere near what they paid for them, analysts said.

With all the above happening, the folks over at Donut Media have made a video in an attempt to provide an explanation of what they think is the reason for the current new car prices that we are facing across the world.

It is also worth noting that car prices have been on the rise for years, even before the global health crisis, as well as the global chip crisis. There are several reasons for that, including inflation, which is not the best possible news, meaning that there is not just a single party at fault.

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Editor's note: For illustration purposes, the photo gallery shows various images of used vehicles.

About the author: Sebastian Toma
Sebastian Toma profile photo

Sebastian's love for cars began at a young age. Little did he know that a career would emerge from this passion (and that it would not, sadly, involve being a professional racecar driver). In over fourteen years, he got behind the wheel of several hundred vehicles and in the offices of the most important car publications in his homeland.
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