Increase in Used Car Prices Due to Covid-19

For the last several years, automakers have taken several actions in order to increase the prices and make more profit out of every sale in an effort to reduce their exposure to cars that offer less profit potential. In fact, large manufacturers such as Ford, GM, Fiat, and Chrysler have stopped the sale of numerous sedans; similarly, companies like Honda and Toyota have also reduced the sales of lower-priced vehicles. 

The global pandemic came to shake things up, starting with the way food is purchased all the way toward how people buy their cars and trucks with greater emphasis onlineThe global shortage of computer chips necessary for vehicles has had a significant impact on this matter. Due to the lockdowns and strict quarantine during the first few months after the virus started, the auto industry started to face some changes in their North American factories, the functioning and production of the industry also seemed to be affected by it. Because the production was inexistent or reduced for a period of time, the industry entered to a phase of very high-demand and lower supply which caused an imbalance within the industry. This has lead to a big jump in prices. In other words, too few vehicles while having too many customers.  

Since it is true that most people are shifting their lifestyles toward a larger emphasis of staying at home, many would infer that cars would not be needed as much. Howeverthe opposite trend has happening this year. The pandemic and importance of social distancing actually reduced the interest in public transportation, thus increasing the reliance on personal cars and trucks. Therefore, many of those who relied on public transportation had to look for other safer alternatives to go out and be socially distant with one other. Without a doubt, buying a car is definitely a covid-friendly transportation alternative.  

Affordability remains an issue for many. While used cars might be the solution for those who can afford new car, the availability of used cars needs to increase in order to meet up with the high demand. Unreasonable prices are expected to open the door to dealers that would focus and get profit from low-priced new cars specifically, vehicles that count with the basic features and nothing else. is noticing a trend where more people are utilizing the marketplace to find just the right car at the right payment level; one that they may not find at a dealer today.