Why Are Used Vehicle Prices So High Right Now?

If you’ve been shopping for a pre-owned car, you’ve probably noticed that buying a used vehicle is significantly more expensive now than it was a year ago. 

Understandably, this can be shocking if you’re expecting to find a used car at a more typical price. However, there are several different reasons for the sudden increase in prices and the experts at Thompson Sales are here to explain. Read about the top three reasons why used vehicle prices are so high right now.

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Reason #1: Semiconductor computer chip shortage

Although it’s not the only cause for the increase in used vehicle costs, there is currently a worldwide semiconductor computer chip shortage. This issue alone is frequently blamed as being the primary cause for the abnormally high used car prices. 

A new car contains thousands of these chips, which do things like monitoring your tire pressure, alert you when you’re low on gas, and keep your car’s entertainment system running smoothly (among many, many other things). However, semiconductor computer chips are also used to make laptops, smartphones, and other personal electronic devices. Not surprisingly, the demand for these computer chips drastically increased during the COVID-19 pandemic, which made it more difficult for car manufacturers to get their hands on them.

As a result, companies like General Motors Company (GM) are not able to manufacture new cars quickly enough to meet the demand. In turn, this has reduced the availability of new cars on dealership lots and increased the demand for used cars. As the demand for used cars goes up, the prices do too.

Reason #2: Increased car demand

With the economy pumped full of stimulus money, the general demand for cars has increased. Buyers are willing and ready to spend their money but the supply cannot keep up. As a result, we are seeing fewer used cars available on lots as dealerships continue to break sales records due to heightened demand.

Reason #3: Low repossession rates

Again, with stimulus money keeping many families afloat, fewer repossessions are good for the well-being of Americans everywhere. However, this also means that these cars, which would usually go to market, don’t ever make it there. The primary supply of commercial vehicle inventory comes from repossessions, off-lease vehicles, and rental fleets, all of which have been snagged up quickly by dealerships or customers due to the high demand.

Related post: What Does Certified Pre-Owned Mean?

Need a used vehicle? Shop at Thompson Sales

If you are shopping for a used vehicle, it’s certainly a difficult time to buy. But the helpful sales associates at Thompson Sales will do everything they can to help you secure a good deal. Call us at 417-763-6811 or contact us online to get more details about our available inventory and expectations for the upcoming months.