How to Navigate this Unique Used Car Market

used car market

In these unprecedented times, how do you go about finding a used car in this crazy market?

Many businesses, including automakers, were forced to temporarily close their plants as the pandemic began. In turn, this created an unprecedented market for buying and selling cars.

Plants stopped buying parts from suppliers when automakers halted assembly lines. Among these parts were semiconductor chips, which improve engine efficiency as well as function as backup cameras. Supply routes for chips were rerouted to the electronics industry as a result. This chain reaction has had a monumental impact on the car industry.

So, how does all of this affect used cars? There are five main things that have changed in the market in recent years.

Many Shoppers Aren’t Buying

Following a rebound in labor market activity in 2021, wages failed to keep up with inflation in 2022. Comparing February 2021 to February 2022, consumer prices increased 8%, and rising prices caused consumers to second-guess large purchases, like cars.

As for job growth, it was down slightly from previous months with 428,000 jobs added in April. When asked why shoppers weren’t buying, nearly half of them said it was related to the cost of the vehicle.

The Average Age of Cars on the Road Rose

According to research, Americans are keeping their cars longer. A car on the road today has an average age of 12 years, up from 9.6 years ten years ago.

Car owners may hold onto their vehicles longer due to the ongoing shortage of microchips. Consumer car-buying behaviors may change in the near future due to a combination of soaring car prices and improved durability with some cars lasting as much as 200,000 miles.

Prices are Fluctuating

The automobile industry was not exempt from inflation over the past year. Between May 2021 and May 2022, the price of all used cars climbed almost 10%. Prices increased most for vans, followed by compact cars. As of January 2022, the upward trend has slowed, and gains have decreased since then.

Buyers Still Want to Buy

Even though prices are higher now than in recent memory, shoppers are still getting out there. Due to the changing market, more buyers are considering used cars, and in particular Certified Pre-Owned.

Sales, in General, Were Down

In March and April of 2022, the sale of used cars decreased by 13%. Industry-wide, car sales are down just over 20%. This fact is likely due to the higher prices and interest rates buyers are facing.

What Does the Future Hold?

It is unclear today what this pandemic will mean in regard to car sales, in particular used cars. One thing is for certain, though, there will always be a market for cars. Americans rely on their vehicles for work, pleasure, and everything in between.

Car production is ramping back up as labor and supply issues even out. This will likely push some shoppers back to the new car realm and decrease the demand for used cars.

This post may contain affiliate links. Meaning a commission is given should you decide to make a purchase through these links, at no cost to you. All products shown are researched and tested to give an accurate review for you.

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