In the last couple of years (post-pandemic situation), the automobile industry encountered an unpredicted shift. From factory lockdown to rising needs of vehicles and several points are gathered to create a perfect storm to encroach the entire market of automobiles. Adding to the height is an upgrade to zero-emission vehicles, which are extremely popular nowadays.
With the beginning of lockdown announced everywhere and economic uncertainties prevailed, the whole world was surprised and worried about how to get back. The automobile industry was similarly affected as worldwide customers suddenly choose to work from home that has led to the decreasing demand for new vehicles. So, what was the actual scenario? How did it impact used car values?
To understand such a complex situation, you need to get a complete idea about the used car market. Due to lockdowns, production of new cars was suddenly stopped, which eventually interrupted its supply chain. But when a sudden need for personal vehicles arose, auto units couldn’t supply enough cars as of chip shortages, restricted workforce, and several other factors. It leads to the limited supply of new cars in the market, influencing people to shop for used car prices to plummet.
This unexpected rise in need of used car pricing suggestively increased throughout post-pandemic situations, experienced a growth of around 40% than before lockdown days. The average value of used cars is even more compared to pre-pandemic states. Due to the shortage of new vehicles supply, most customers with money are eager to spend on purchasing used cars and contribute to the used car market.
That’s worth saying, the pricing of used cars will plummet as of the sudden decrease in demand for brand-new cars. And so, used car values are skyrocketed compared to some of their showroom new models. While this trend will ultimately go worthless as production of new vehicles catches up, and people will gain re-interest to purchase new vehicles at expensive prices.
So, let’s find the basic reasons for the sudden rise in used car prices and growth in the used car market –
• Shortage of Chip
• Rental Companies
• Limited Workforce Results In No Production of New Cars
Even when the production of new vehicles returns to normal, the used car market will need a certain amount of time to recover to its earlier position. And so, its need for shipments, trade-ins, and other related services will have to wait to pick up once again.
To conclude, the used car market is currently surging as of the high demand and it will take a long time to recover. Now that you’ve plans to purchase a new vehicle at expensive rates, retaining your existing (used) car and postponing your purchase plans is indeed a smart choice. In order to sell or purchase a used car at industry-standard prices, you can give us a call at (337) 447-4457 to discuss your needs and get exact solutions. Call today!