Why Used Cars Are in High Demand Right Now

Shopping for a new automobile nowadays is increasingly difficult. The situation is partly due to the global semiconductor shortage. While waiting for the microchips they need, many automobile manufacturers face temporary shutdowns and production delays. Because of this, new car prices have risen dramatically, causing an increased demand for used cars.

According to industry analysts, vehicle supplies won’t return to normal until 2023. So, let’s look at how this crisis impacts the used car market.  

Why the Recent Upsurge in Used Cars for Sale?

Microchips are crucial to new car production. Without them, production declines, and buyers can’t find the new vehicles they want. Even if they find it, they pay thousands of dollars over the sticker price. Most people, however, cannot afford the steep new car costs.

Here are a few examples of what’s going on with new car prices:

• A new Kia Telluride SUV goes for $3,700 above MSRP.
• Range Rovers and Cadillac Escalades sell for $3,000 to $6,000 above MSRP.
• Corvette Stingray and Ford Mustang Shelby go for 5% to 8% over MSRP.
• Mercedes-Benz G-Class sells for about $30,405 above MSRP.

About 82% of new car buyers shell out more than sticker price, which is already at an all-time high, according to Money.com. Rental car companies also feel the pinch. They sold a lot of vehicles when people stopped traveling because of the COVID outbreak. Today, rental car companies can’t afford to replenish their stock due to current market conditions.

Waiting for prices to drop and availability to return to normal isn’t always convenient for most people or businesses. So, purchasing a more affordable, readily available used car makes sense.

Dealers & Customers Need Quality Used Cars

Microchip shortages are causing more problems than just inflated sticker prices on new cars. People who cannot afford a new car also struggle to find used cars at a reasonable price. Since January, list prices for used cars are up 40% from this time last year.  

Carfax reports that the average listing price for a used car is at a record high of about $28,000. Besides high prices, inventories are low nationwide. Shoppers for new or used cars must keep an open mind, be patient, and prepare to pay more.

But, there’s good news. Used cars have a greater trade-in value today.  Dealers want and need more used cars to meet customer demand. Vehicles that are less than two years old are incredibly popular.

Nick Woolard of Consumer Reports describes the used car market this way:

“It’s a great time to trade or sell a used vehicle—used vehicles are going up in value, and that doesn’t happen that often.”

For now, options are limited when it comes to finding alternatives for the high prices. People who plan to wait for prices to drop will have to be patient.

What Is Ford Doing to Combat the Chip Shortage?

Ford Motor Company expects to ship 10% to 15% more new cars this year compared to last year. This forecast is based on Ford’s agreement with chip contractor GlobalFoundries.

Per the agreement, Global will produce more semiconductors not only for Ford but for the entire automotive industry.

Wayne Ford: The Easy Way to Buy a New or Used Car

Are you in the market for a reliable, affordable new or used car?  At Wayne Ford, you’ll find an extensive inventory of new cars and certified used vehicles.  

Contact Wayne Ford today for the easiest, quickest car buying experience anywhere. Reach us online, by phone, or visit our dealership for a closer look at our great selection of vehicles, new or used. We will make sure you find what you’re looking for. 

Sources:

abcnews.go.com/ – Out of Control – Buyers Paying Thousands Over Sticker Price for New Cars

consumerreports.org/ – How to Navigate Surging Used-Car Prices

abcnews.go.com/ – Used Car Prices at Record High, Chip Shortage and High Demand to Blame

money.com/– Beyond Abnormal: 82% of New Car Buyers Are Paying Above Sticker Price