The Difficulties With Used Cars May Soon Be Over

Since the start of the pandemic isolation, the automotive industry has been taking a lot of hits. From production plant shutdowns and microchips shortages to labor problems and skyrocketing prices, a lot has changed in the car market in the past two years.

The good news is that, at least for used cars, things are finally settling into a more normal state. What’s been happening with used vehicles lately, and how is it starting to change now? Let’s find out.

Demand and Value of Used Inventory Skyrocketed in the Last Few Years

There’s no way around it – the microchip shortage practically stalled new car manufacturing. Less new cars were produced, and the ones that were made had fewer features and were less valuable to consumers. The gap in new car production had to be taken up by something, which increased the demand for used cars.

But used cars are a limited resource that came almost exclusively from people selling or trading in their old vehicles, usually with the intent of getting a new one immediately. Demand increased, and supply didn’t because people held onto their older cars instead of trading or selling them.

This caused a dramatic increase in price for used cars that were far above typical inflation, making buying a used vehicle nearly impossible for many because of either cost or availability. That’s where the pre-owned market has stood recently, but recent quarterly reports show that this may change again soon.

Demand for Pre-Owned Vehicles is Finally Dying Down – Will Prices Follow?

Reports from AutoNation have shown that, while new vehicle supply and sales are still lower than they should be, the demand for used cars has finally started to go down. With this in mind, it’s predicted that price and availability issues will start evening out, too.

It’s important to understand that this is a “new normal” kind of change rather than a “going back to how it was” one because of the continued issues with new vehicle stock. If you compare the pre-pandemic market to now, things have changed drastically. But if you compare the market six months ago to today’s market, you’ll find things are going much better than they used to.

We can’t say that things will be smooth sailing for used car buyers yet, but the pressure people have been under when selling or buying used cars is definitely being reduced. Just remember that as demand and value for used cars changes, you may miss your opportunity to sell your unneeded vehicle for a greater profit.

If you’re interested in what’s happening to the automotive industry these days, keep your eyes and ears open for more news in the next few weeks as quarterly reports like the one from AutoNation are being released and analyzed.

More changes are on the horizon, and they could mean the difference between taking a chance on buying or selling and staying put if you’re not careful.