But even as prices decline, there is a bit of a tug-of-war dynamic going on for consumers. Since August of last year, owing in large part to growing inventories, the average price has fallen to about $28,500, about an 8% decline. “That’s a huge jump in price, especially just over the course of a year or year and a half,” remarked Yoon. A year later, the average price ballooned to more than $31,000 - a whopping 37% increase from February 2021. By August of that same year, the average price had increased by nearly 30%. In early February 2021, the average price of a used car was around $22,700, according to an index by CarGurus. “People weren’t getting discounts anymore on new or used cars,” Yoon said.īecause new cars were so expensive due to inventory issues, people started buying up used cars to compensate, which, in turn, drove the prices of used cars up alongside new cars. demand, the country found itself in a bad position. So when supply from overseas didn’t meet U.S. Further complicating the matter, the United States relies on foreign countries such as China to provide semiconductors.
Some car companies were forced to halt production lines at major factories because of the shortage. Semiconductors, a vital (and expensive) part of modern-day gadgets and cars, saw a huge uptick in demand over the past few years, particularly during the pandemic, causing a global shortage.įED SLOWS ITS RATE-HIKING CAMPAIGN EVEN MORE AS INFLATION STARTS TO ABATE The economy suffered from a global semiconductor chip shortage.
Joseph Yoon, consumer insights analyst for Edmunds, told the Washington Examiner that the most notable change in the auto market the customers have had to face over the past couple of years has been the inventory shortage following the outset of the coronavirus pandemic.
While inventories have since picked up, growing supply and applying downward pressure to prices, higher interest rates as a result of the Federal Reserve’s campaign to drive down inflation have had a contradictory effect on buying because they have made getting a loan more costly. That's due in large part to a global microchip shortage that wreaked havoc on inventory in 2020-21 as COVID-19 shut down large swaths of the economy. One of the most inflated goods during the period following the pandemic has been vehicles. Though how much they will decline in the year ahead from COVID-19 pandemic highs is uncertain as rising interest rates compete with increasing inventory to draw a complicated picture for the automobile market. After peaking last year, used car prices appear to be on the way down.
0 kommentar(er)
