Why Are Used Cars So Expensive Right Now? 4 Main Reasons
Why Are Used Cars So Expensive Right Now? 4 Main Reasons
Posted on July 30, 2022
Have you been looking for a used car? Wondered why used cars are so expensive right now and steadily increasing? Looking to sell your old car to a dealer and wondered why the offer was higher than you thought?
Strange things are happening right now that are making used cars so expensive. Those reasons include:
Coronavirus
Now Canada is opening up again, people are determined to enjoy life a little more, spend any money they saved during the pandemic, enjoy a road trip vacation or just get back to work.
Coronavirus also caused shortages within the new car supply chain so there are longer waiting lists than usual.
From extracting raw materials from the earth to manufacturing, parts, tires, glass manufacture to the new car production line, no part of the supply chain has been left untouched by the pandemic.
These have both increased demand for cars more than we would usually see this time of year.
Global semiconductor shortages
The global semiconductor shortage has also contributed to new car supply chains and those longer wait times. There is a much smaller inventory of new cars right now and wait times are longer than ever.
Just about all new cars used semiconductors somewhere, in antilock brakes, autonomous technology, reversing cameras or sensors and anything that uses electronics.
The shortage has had a serious impact on new car production and is projected to last at least another year.
This means more people are electing to buy used this time instead of new, which reduces available used car stock, increasing the value of quality used cars.
People keeping cars for longer
The pandemic, changing financial circumstances, an uncertain economic future and other influences means more people are keeping their cars for longer.
This means the usual ebb and flow of buying and selling has slowed and the supply of used cars along with it. With fewer cars to choose from, dealers are willing to pay more than before to secure a good quality car.
Increased competition
The rise of used car buying websites and larger companies willing to buy and collect used cars has caused dealers to face stiff competition. They compete on price, convenience, customer service and every element of car sales and this has an obvious impact on values.
The more opportunities someone has to sell a used car, the more competition there is to attract that customer. One way to do that is price.
All this is bad news if you’re in the market for a used car but not if you’re planning to sell one. It means dealerships like Car Nation Canada are more willing to pay higher prices than ever before!
When you’re ready for a car lease or loan, get in touch with the St. Catharines auto loan experts at Northway Ford for great deals on auto finance.
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