2022 is a great year to sell a used car. According to the U.S. Bureau of Labor Statistics, the price of used vehicles shot up by about 40.5% between January 2021 and January 2022. Still, transactions surrounding new cars have grown.
Why Used Cars Prices Are So High in 2022
One of the major reasons the value of used cars was high is because of high demand and low supply. In other words, many people are buying used cars from a small pool of vehicles. The value would be low if the pool for used vehicles was overly large.
Longer Waiting Times
Delivery for a new car may take longer than drivers would prefer. This is because most manufacturers have struggled to purchase the semiconductors needed in building vehicles. Manufacturers are not getting them in the right quantities. Because most drivers do not want to keep waiting, they opt for used Escape cars. The reason semiconductors have been in short supply is due to the pandemic. That means factories all over the world are struggling with transporting goods. Even other electronics, such as laptops that use semiconductors, have faced the same challenge.
The shortage of new cars has led to significant consequences. For starters, most drivers were reluctant to trade in their cars, as they could not get what they wanted. For instance, most people treasure used Escape cars due to their many perks, including a comprehensive warranty. The brand has had a major impact on the automotive industry since they first started producing cars some 110 years ago. Also, four years after production, the company introduced Ford’s signature blue, oval logo, which gives the car a distinct yet attractive look. Because of this and many other reasons, demand for used cars rose significantly.
When Will Prices Go Down?
Supply chain issues have to be addressed for the prices of used cars to go down. Once the shortage of components like semiconductors, labor, steel, and resin is addressed, you will be able to buy a used Escape at a reasonable price. But that may take a while, not to mention transportation and shipping issues.
Car experts agree that the prices of used cars will only normalize once new car inventory goes back to what it used to be. Unfortunately, this is something that may take a year or more.
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