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Traverse City Mi 49686
Garfield Auto Service Center
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Traverse City Mi 49686
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Why Are Used Cars So Expensive?

May 6, 2021, 12:00 am

Looking for a used car? You’ve almost certainly noticed prices have inched up over the past few months. Here’s why the used car market is getting even more pricey. 

Like everything, it’s the pandemic. More specifically, the price of used cars has been nudged north by a number of factors in the automotive industry. First, supply. New car production came to a halt last spring, causing months of delays. Those delays were exacerbated throughout the spring, summer, and fall of 2020 because of myriad shortages in aluminum, computer chips, rubber, and other raw materials. Experts were optimistic that those supply chain issues would be resolved by the first quarter of 2021, but many manufacturers are still facing issues getting the right parts in the right place at the right time. 

According to a market study, used car prices are up 12.5% from February 2020 to February 2021. On a $21,000 vehicle, that’s nearly $2,000 more on a vehicle that would normally depreciate in value. Even lightly used cars and trucks are selling for 10-15% more than their retail sticker price a year ago. 

On top of everything, demand is high, too. Experts believe a number of factors have driven demand in the last year. For those who had relied on public transit, many have purchased cars as a way to move around safely, without risking exposure. Even as people get back to work in person this year, the combination of tax refunds, stimulus money, and disposable income will allow many people to purchase vehicles as they get back to daily commuting. This trend should continue through the rest of the year, so if you are in the market, here are a few tips. 

First, be open to a lot of makes and models and compare mileage, repair history, and cosmetic defects carefully. The more you know about any used vehicle, the better, and take time to dig. If you’re working with a dealership, don’t hesitate to finance the sale price to make the most of low-interest rates, even if you can pay cash. Finally, get a second opinion; we’ll gladly look over a used car for you!

Posted by Garfield Auto at 12:00 am
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