Used car prices soar
Don't be surprised if used cars are harder to find and more expensive for years to come, auto industry experts are warning.
By the numbers: The average price of a used vehicle surged nearly 14% between January and December of 2020 — roughly 10 times the rate of inflation — to over $23,000, AP reports.
The big picture: COVID-19 created a massive ripple effect, as Axios transportation correspondent Joann Muller reported last year.
- Major auto manufacturers stopped production. That led to a shortage of vehicles on dealer lots, especially trucks and SUVs.
- Fewer people traded in vehicles or returned leases during the pandemic's early lockdowns.
- Rental companies bought fewer cars because of travel shutdowns, reducing the number they will sell used, AP notes.
Between the lines: The $30K sedan is a thing of the past, Joann tells me.
- Many manufacturers even stopped producing sedans in the U.S. or abandoned their lower-priced models in favor of trucks and SUVs.
The bottom line: Low interest rates plus stimulus checks plus supply crunches all point in the same direction.