For those in the market for a used vehicle, one may end up spending more than they anticipated, experts warn.
“New car prices, used car prices, old used cars, trade-ins, I don’t care what it is. If you’re looking at car anything, it’s getting expensive,” said Ivan Drury, Edmunds.com senior manager of insights and car value expert, to Fox Business. “Nothing, absolutely nothing compares to what we’re seeing in today’s market.”
In fact, Department of Labor stats indicate that used vehicle prices have jumped up by a massive 40%, and new vehicles have seen a 12% increase over last year.
These higher prices are the result of the chip shortage which has left many electronics hard to purchase, and made existing items, such as used vehicles, more valuable on the market. Other factors include the increased price of labor, and supply chain disruptions and delays. However, Drury indicated that the largest part of the problem was the chip availability.
“You could really attribute 90 to 95% of this problem with production down to just the chips,” he confirmed.
While things are expected to settle down in 2022 as economies return to normal following global disruption, but prices may not return to normal until 2023.
“It’s a dealer’s market, it’s a seller’s market, and we’ve seen that consumers are paying big premiums to buy a car,” said Mark Schirmer from Cox Automotive.
“New car prices will not be gaining like they have, but we also don’t expect significant drops in new or used car prices in the foreseeable future,” he added.
This news is likely bad for teens looking to purchase their first cars, and those whose careers were affected by the pandemic who may need to switch to a slightly more affordable vehicle.
More on specific pricing differences from Fox Business:
According to Edmunds data, a three-year-old Dodge Grand Caravan is worth more than $25,000 today – up 69% from one year ago. A Nissan Versa of the same age cost $9,842 last January, but has since increased 66% to an average of $16,366.
At Barbera Autoland in Philadelphia, a 2019 Chevy Equinox had an MSRP of $26,700 when it first rolled onto the lot. The sticker price today is $29,984.
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