New and used car prices won’t drop any time soon
If you are about to buy a new or used car, be prepared to pay more. That is if you are even able to find what you are looking for.
Used car prices are up almost 40% and new car prices about 12% from a year ago.
The average price increase over the year was $6,220, compared to $3,301 in 2020 and $1,799 in 2019.
“It’s a dealer market, it’s a seller’s market, and we’ve seen consumers pay significant premiums to buy a car,” said Mark Schirmer of Cox Automotive.
THE AVERAGE PRICE OF NEW CARS REACHES A RECORD OF $47,077 IN DECEMBER
Those prices aren’t expected to drop anytime soon, Schrimer said. It could be the end of the year before prices start to drop.
“New car prices won’t rise the way they have, but we also don’t expect any significant declines in new or used car prices in the foreseeable future,” he said. .
So what is causing these higher prices? Experts say it’s because of a nationwide shortage of computer chips, rising labor and production costs, and shipping delays. Owners of used car dealerships say they’re dealing with low inventory that’s forcing them to raise prices.
“I liken it to real estate now,” Shawn Shakour, of S&R Auto Sales in Sacramento, Californianoted.
Shakour said demand is higher than ever for used cars. This forces him to pay more for them at auction.
“A customer comes in thinking we’re making these huge profits on the cars, and we’re not. The auction prices are going up, it’s like a domino effect,” Shakour said.
A few miles from TRD Auto Sales in Sacramento, Wael Ibrahim said he’s also been hit hard by rising prices.
“Every time I look at a used car that I’m trying to buy, I feel my heart beating so hard,” Wael said.
Normally Wael would have plenty of used cars, but it’s only half full at the moment. He said he had trouble buying cars for sale.
“They’re paying more for labor and they’re paying more for material. It’s tough all the way, it’s tough for used car dealerships to survive right now,” Wael said.