Used automobile costs soar in 2021 because of new automobile scarcity

2021 hasn’t simply been a foul 12 months to seek out an inexpensive new automobile. It was additionally a foul 12 months to seek out an inexpensive used automobile.

Autotrader analyst Michelle Krebs stated that with the manufacturing of latest autos plunged into the pc chip scarcity that started in March, many shoppers have turned to the used automobile market as an alternative.

The place they discovered excessive costs and a scarcity too.

Krebs says that just about all dependable sources of used automobiles have declined this 12 months. Individuals who could not discover a used automobile to exchange their present used automobile merely invested in repairs.

There has additionally been a lower within the variety of leased autos traded in.

“Individuals hold their leased autos till a brand new product hits the market,” Krebs stated. “And the automakers are extending the leases.”

Krebs stated it additionally makes lots of sensible and monetary sense for individuals to purchase their leased automobiles on the finish of the lease. It’s as a result of new automobiles are so costly that purchasing their rental automobiles was an excellent deal.

Automobile rental firms additionally have not traded of their automobiles for brand spanking new ones – because of the scarcity of latest automobiles. The truth is, “now they’re shopping for used automobiles as a result of they cannot purchase new automobiles. ”

The rise in demand, mixed with the weak provide, contributed to an almost 40% enhance in used automobile costs in 2021, in accordance with the Client Worth Index of the US Bureau of Labor Statistics. United.

Krebs says the used automobile scarcity is not going to ease till the brand new automobile scarcity subsides – and that would take the entire of 2022 or extra.

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