autoevolution
 

Used Cars Prices Going Through the Roof, Average Car Will Cost You Almost $30,000

Inflation is raising the prices for all sorts of goods and services, including cars, and that means we have to pay more to bring home our next ride. It’s not just the new cars that are getting more expensive, but also the used-car market is on fire right now. New separate analyses by Black Book and Kelly Blue Book (KBB) show the average used cars prices went up around 35% compared to the start of the year levels.
Used car prices are going through the roof 6 photos
Photo: DWilliam/Pixabay
Used car prices are going through the roofUsed car prices are going through the roofUsed car prices are going through the roofUsed car prices are going through the roofUsed car prices are going through the roof
The price analysis done by Black Book shows an accelerated price rise in December, with the average sold price for used cars at $27,500 up from $27,000 in November. Black Book’s data takes into account both franchise and independent dealers, with more than 95% of available used vehicles for sale. The trend is similar to what KBB found in its study.

The reason used cars were getting insanely expensive in the past months is the huge discrepancy between supply and demand in the car market. With all the chip shortage, supply-chain problems, and Covid-19 disruptions, the new cars market has crawled to a stall, with backlogs and waiting times that stretch for many months. This prompted prospective buyers to look for alternatives on the used-cars market, but because people could not buy new cars, they were also not trading in their older cars. This and the increased demand were enough to push the prices into the stratosphere.

KBB confirms the used-car inventory is 15% lower than it was a year ago, with the situation’s prospects slowly improving. Used-car dealers in the U.S. had 2.31 million vehicles in stock at the end of November, a tad more than the 2.25 million they had at the end of October. Those are usually newer models, with the inventory of cars up to two years old growing faster than that of cars 2-8 years old.

This partly explains the hike in average price, as newer vehicles tend to be more expensive. Nevertheless, buyers are mostly looking for the cheaper models that are 8-years old or older, and those are in short supply right now. The sweet spot price is under $10,000, but the price hikes mean those buyers will have to settle for older cars. This lands in the post-2008 recession territory when carmakers severely scaled back production.

We see how this price hike will affect those who try to buy a car, but it might prove a boon for those selling their car. It’s probably a good idea to sell your car now, as an easing of production glitches and an increase in used-car inventories next year might lower the prices to less insane numbers.
If you liked the article, please follow us:  Google News icon Google News Youtube Instagram X (Twitter)
About the author: Cristian Agatie
Cristian Agatie profile photo

After his childhood dream of becoming a "tractor operator" didn't pan out, Cristian turned to journalism, first in print and later moving to online media. His top interests are electric vehicles and new energy solutions.
Full profile

 

Would you like AUTOEVOLUTION to send you notifications?

You will only receive our top stories