If you’ve been on the fence about when to sell your car, U.S. News & World Report says now is the time to take the plunge. Used car prices have recently reached a record high, which means you may be able to get a great offer on your current car.
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Jonathan Banks, the vice-president of Valuation Services at J.D. Power, said, “Through the first three weeks of March, wholesale prices increased 2.5% to 3% per week, and are now 5% higher than their previous all-time high recorded back in August 2020.”
So why are these prices soaring? Take a look at the key reasons for this temporary change.
1. A scarcity of new cars
Photo: Mitsubishi Motors
At the beginning of the coronavirus pandemic, automakers had to pause production in the U.S. Not only did this delay the release of new cars initially, but it has also now contributed to a microchip shortage. Many computer chip makers began supplying chips to electronics manufacturers once vehicle production halted, turning away from the automotive industry for the time being.
When you combine these supply chain issues with other recent problems like the Suez Canal blockage, it’s no surprise that U.S. dealers are currently low on new cars. This in turn means that dealers are willing to pay more for used cars to fill up their lots.
2. An increase in shoppers
While dealerships have a low supply right now, demand is especially high and driving up prices. Due to the pandemic, some commuters have become wary of public transportation and rideshares. Many of these commuters are now interested in buying a car to avoid being in contact with others. In addition, drivers who have been delaying car purchases because of the pandemic may now feel comfortable shopping again.
3. Extra spending money
Thanks to stimulus checks and annual tax refunds, some drivers have extra spending money in their bank accounts. This means they may not only decide to purchase a vehicle but also be willing to pay more for it than they would’ve in the past. The combination of richer shoppers and fewer car options has played a significant role in the price inflation of used cars.
Is It Better to Sell or Trade Your Car? The benefits of making a trade
If you’re ready to get rid of your current car, you may want to sell or trade it in soon before these market forces change.
Amanda Drago lives in West Chester, Ohio with her wonderful family, which includes her adorable dog, Coco. Amanda recently graduated from Miami University with degrees in both marketing and creative writing. However, if she was ever forced to change career paths, she imagines that she would train dogs for movies. In her spare time, she enjoys reading, writing, and watching Netflix. She also has a special place in her heart for theatre and purchases tickets to as many shows as she can. See more articles by Amanda.