Experts are warning that the price of used cars is rising faster than that of new cars.
“I don’t care if it’s new car prices, used car prices, old used cars, trade-ins, or anything else. “If you’re looking at cars, it’s getting expensive,” Ivan Drury, senior manager of insights at Edmunds.com, told FOX Business’ Jeff Flock.
The car valuation expert responded to recent U.S. Department of Labor statistics revealing that used car prices are up nearly 40% from last year. New car sales are also up 12%.
“Nothing, absolutely nothing compares to what we’re seeing in the market today,” Drury said.
A three-year-old Dodge Grand Caravan is now worth more than $25,000, up 69 percent from a year ago, according to Edmunds data. A Nissan Versa of the same age cost $9,842 in January of last year, but has since risen 66 percent to an average of $16,366.
Prepare to spend more money; experts predict that prices will not fall until the end of the year.
When it first arrived at Barbera Autoland in Philadelphia, a 2019 Chevy Equinox had an MSRP of $26,700. The current asking price is $29,984.
Higher prices are being driven up by a global computer chip shortage, increased labour and production costs, and supply chain delays.
According to experts, car prices are unlikely to fall until the end of 2022.
“You could really attribute 90 to 95 percent of this production problem to just the chips,” Drury said.
While some companies, such as Ford, have previously stated that the chip shortage could be alleviated this year, dealers do not expect prices to stabilise until 2023.
“It’s a dealer’s market, a seller’s market, and we’ve seen that consumers are paying big premiums to buy a car,” Cox Automotive’s Mark Schirmer told FOX Business.
“We don’t expect new car prices to rise as much as they have in the past, but we also don’t expect significant drops in new or used car prices in the near future,” he said.