Why are used cars so expensive? 

Why are used cars so expensive? 

Used cars for sale 

If you have been searching for a used car for sale lately, you will have noticed some costs as much as new. Since the start of the pandemic, the used car market has been absurdly volatile and people are scratching their heads asking why, when will prices drop and what are we to do if we need a car now?


iStock 96920794
Old used cars for sale waiting for a buyer at a dealership. Photo: Stock. 

The pandemic hit car dealerships across the country especially hard. Due to global shortages, production of newer cars was slowed resulting in lower new car deliveries. That led to fewer consumers purchasing and resulted in fewer used car inventories.  

To remedy the high demand for used cars, dealerships offered top dollars for trade-ins. Based on my research, used vehicles have cost about 40% more than they did before the pandemic, according to the latest economics report of JP Morgan.  


Why are used cars for sale so expensive now? 

  1. The scarcity of microchips does not subside, and the entire world has had to slow down the production of cars. High dealer markups and a lack of options are forcing more buyers to shop for secondhand vehicles, claims Business Insider.  
     
    TIP: All that uncertainty and volatility of prices is bringing a lot of new buyers to the used market. They are more than prepared to fix their old junks, before spending a lot of money on a brand-new set of wheels. In a country that has gotten used to not fixing its cars, repairing is becoming essential in these times of scarcity. 
     
  1. For some experts, the others responsible for the rise in prices of used cars are rental agencies. Which are typically a major source of used inventory. Rental companies buy between 2 million to 3 million cars a year and usually turn them over every 2 years. With people traveling again around the country, agencies are rebuying the cars they sold during the pandemic. And they are turning the used market upside down. 
     
  1. And, if it was not enough, with the new car prices so elevated, people are holding onto their aging vehicles longer instead of trading them in, cutting off the flow of cars onto the used market.  

So, when will all this mess end? 

The good news is that prices did ease a little this month. They are heading back to earth. But, as all experts agree, the supply mess is not going away anytime soon. That means that this messy secondhand market will be the new normal for the rest of the year. But, if it is of any consolation, connoisseurs, like Ford and Intel CEOs, agree that by the end of this year and the beginning of 2023, this will be an old story! 


A straightforward guide for buying a used car in 2022 

Even if the market is upside down, you can always follow simple tips to get the most out of your purchase.  

Three Rivers, California, USA - June 15, 2017: Roadside and old retro car put up for sale. Picturesque highway in the countryside in California, USA, and selling an old car. Road to the Sequoia National Park.
Three Rivers, California, USA – June 15, 2017: Roadside and old retro car put up for sale. Picturesque highway in the countryside in California, USA, and selling an old car. Road to the Sequoia National Park.

Do not limit yourself to your area’s offers. Use online shopping tools to better your options. Certified pre-owned programs offer some additional peace of mind when purchasing a car remotely or online, and a good deal in finding the exact right vehicle may offset car shipping costs.  


Expand Your Car Search Nationwide by Shipping It 


Wait!

Be aware of this bad timing. Take your time and expand your searches. “Our best advice would be to give yourself longer for the shopping process and recognize it will take time to find the best intersection between what a consumer wants to buy and the budget they have allocated to the purchase,” says Stephanie Brinley, principal automotive analyst at IHS Markit.  

Be patient, but sharp 

Once you find the car of your dreams, the one that meets your budget and expectations, do not overthink. Used cars are rapidly running low and, after a long search, you do not want to miss the opportunity. 

Be flexible  

In these mad times of low inventories and shortage, you will not be able to meet every little, tiny want. Whether the color, mileage, heated seats, or features, you will have to choose between real needs vs. wants if you want to have a chance to get a car soon. 

Check out return policies 

Most reliable dealerships will offer you 7 days return policy. Some, like the used car giant CarMax, even extended it to 30-day coverage.  

Do not ask for recommendations 

Yes, although it sounds pushy, leaving everything in the hands of the seller can increase the final value of the car by almost 30 percent. Do your search, and have some reference models and information. Being active in the negotiation will help you better surf the rising prices of the used market. 


Invest in security, save time and money 

Why choose RCG Logistics? 

For almost twenty years, RCG Logistics has worked for hundreds of people and companies transporting from one to hundreds of cars in a single trip. We too have had to navigate the difficulties of these times, in which the prices of fuel and other goods have increased astronomically. 

So, we’re on board with you. We work hand in hand with reliable dealerships and auctions that can advise you. As consumers, we are suffering a cascade of rising prices, in food, gasoline, lodging, and cars. You don’t have to add a new expense by driving yourself back and forth to get the car you want.  

Leave it in our hands, do not suffer the dangers of a long road trip, and let us take the havoc from your shoulders. 

If you want to know more about our shipping prices you can get a free car shipping quote now or call one of our agents, who will guide you through all our services and dealerships alliances.  


About the Author: Maria Pelaez

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I am Content Creator at RCG and I cover the transportation and relocation industries. My background is in journalism and writing for Mass Media and podcasts; the experience of creating content for a transport logistics company in the United States has been rewarding. As a Colombian, I have had the chance to learn a lot about the American culture and all the people behind the transportation industry.

Author

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Posted by
Maria Pelaez
Post Date
05/06/2022

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