In the past three weeks alone, used car prices have risen by an average of 5%, and used car sellers say they have not seen prices so high in the past 20 years. The rise in the value of used cars in the United States is driven by several coincidences.
First, automakers cut production due to interruptions in the supply of components, including semiconductors, which led to a shortage of new cars at dealerships. In addition, the authorities are paying compensation to citizens for the duration of the pandemic, and in the near future, it is expected to start new payments under the “Save America” worth 1.9 trillion dollars. As a result, demand exceeded supply, and buyers rushed to buy used cars.
There are even paradoxical cases when used cars are sold more expensive than similar new cars. For example, the new 2021 Kia Soul LX is priced at $ 17,724, but the one-year-old Kia Soul LX 2020 with 5,000 miles was recently auctioned off at Manheim for $ 18,500, to which the buyer would have to add another $ 500 in site commission.
Another example – the 2016 Kia Rio LX sold for $ 12,600 plus $ 500 in commission. This is more than $ 4,000 above the estimated market average for such a model.
For Americans with “extra” cars, now is the best time to get rid of them, analysts say. At the same time, those who want to save money on buying a used car should wait until the turbulence in the market stops and prices return to the predicted ranges.