Used cars used to be the go-to option for buyers with light pockets, students running on a small budget, and just about anyone who could get behind the wheel without breaking the bank. In recent times, however, used car prices have hit the roof, resulting in difficulties in procuring and maintaining.
Several factors are believed to be responsible for this shape-shifting value of cars, from necessities anyone can own to becoming exclusive four-wheeled luxuries only for those who can afford to splurge the cash. Here is what an online car forum is saying about it.
Material Shortage Post Pandemic
The pandemic has caused a shortage of materials, such as transistors, plastics, and steel. These shortages have affected the production of new and used cars, increasing prices. A man named Wilson explains, “The pandemic disrupted supply chains, which has caused shortages of certain materials. This has affected the production of new and used cars, leading to higher prices.”
The chip, an essential part of a car, had a session of unavailability in the COVID-19 era, causing a ripple of low production and increasing the backlog of orders that couldn’t be met. In the words of one, ”Supply and demand curve specifies that significance went up as fairly used vehicles become the majority of drivable ones sold.”
The acclaimed chip shortage is now feasible. However, automakers would rather continue “with the high demand and low supply flow” to continue making excess money from used autos and use chips to produce only “costly model cars,” a final user alleges.
Lack of Rental Cars
Another factor contributing to the rise in used car prices is the lack of rental cars available. As more people are starting to travel again, there has been an increase in demand for rental cars. However, many car rental companies have sold off a significant portion of their fleets to stay afloat. This has resulted in a shortage of rental cars, which has led to increased demand for used vehicles.
Increase Demand Post Pandemic
Another reason for the rise in used car prices is increased car demand. After the pandemic, according to some, many decided to buy a car for the first time or upgrade it. This led to increased demand which resulted in higher prices.
Excess Inventory Above Market Value
Car dealing companies emerged to have taken drastic moves of ‘buying uninspected cars at prices way over the market value’ because they wanted more stock.
To sweeten the selling offer, dealers give a 30-day guarantee of repairing any fault the car develops in that period; this eventually leads to many conks out cars that get sold to another dealer. One says there is a massive underestimation of how much damage billions of dollars can do to a section.
The 2017 hurricane is not one that Americans will forget quickly. Someone says pre-used vehicles’ prices aren’t wholly accredited to the chip shortage. The prices of used autos were predicted to increase because many cars were destroyed in the hurricane likely.
Ukraine is a significant supplier of wiring needed in car manufacturing, and the current war makes it difficult to procure them. As a result, people are now informed to wait at least two years when ordering new vehicles. Speaking of how much this affected car production, an individual says they’ve been waiting over 15 months and still do not have a build date for their car.
Another factor contributing to the rise in used car prices is Inflation. As the cost of living increases, so do the prices of goods and services, cars included. One user says, “Inflation is causing the cost of living to go up, which means the cost of goods and services is also increasing. A final user voiced a divergent perspective, “The U.S. dollar value has decreased, which means it takes more dollars to buy goods and services.”
This thread inspired this post.
This article originally appeared on MyCarMakesNoise.
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