Désolé, cet article est seulement disponible en anglais américain. Pour le confort de l’utilisateur, le contenu est affiché ci-dessous dans une autre langue. Vous pouvez cliquer le lien pour changer de langue active.
If you have been following up close on used car prices all over, you might have noticed the ever-rising
price trend of used cars. This has been a continuous trend for used car dealerships, who have set used
car prices at unimaginable scales. The effects of high prices on used cars might have affected a lot of
first-time buyers who wish to own a vehicle but whose hopes got shuttered due to a high budget
needed. The reasons behind the rise in used car prices may have yet to be discovered to you. That is
why we have analyzed all the reasons that could support the high prices of used cars.
Abnormal demand
Remember the Covid pandemic in 2020? Well, this is one period that causes a non-healing wound on
the global economy. During the pandemic, the world’s day-to-day activities almost reached a standstill,
with only the essential services taking place. One of the most affected sectors was the automobile line.
Car dealerships, in that case, were forced to shut down while some operated on such a small scale since
the was less demand for a used car.
However, once the pandemic began fading, we saw a major resuscitation of the economy. This has
brought with it abnormal pent-up demand for used cars. The high on used cars has forced the dealership
to significantly raise the price of used cars to balance supply and demand.
Semiconductor chip crisis
Semiconductor chips are found in all-modern cars and are responsible for many functions. These chips
are essential for controlling key operations, infotainment systems, safety features, and engine and
powertrain monitoring. The chip coordinates all the functions among the various car parts. It is also used
during vehicle diagnosis to find out any issues in case of damage.
Production of semiconductor chips was sadly struck by the entry of Covid 19 back in 2020. Most
production companies laid off most of their staff and cut down on the production rates, while some shut
down operations completely. Th effect of Covid 19 slowed down semiconductor chip production, which
saw fewer new car productions. With fewer new cars produced globally, those used and certified pre-
owned cars rose in demand.
More disposable income
During Covid, most people were restricted from traveling, vacations, and tours that would have rather
been a way of spending money accumulated. Such restrictions made people retain most of their income
and savings rather than spending it like before. Since most of the parts globally are back to normalcy,
people have so much saved up, and one way of spending the money is by purchasing cars.
The increase in disposable money people has, alongside the pent-up demand, all contribute to the
increased prices of used cars in 2024.
Low-used car stock
All the factors behind the increase in the price of used cars affect the stock of those available in the
market. With reduced production of new cars, attention is now forwarded to the used cars available. On
top of that, most car owners hold their cars dearly and do not want to sell them off. As a result, the amount of used cars in the market has reduced significantly. Once there is a shortage, prices have to
shoot up in the used car stock.
Inflation
Inflation is undoubtedly the biggest reason second-hand cars are so expensive. The global inflation rate
has been rising in the last few years at alarming rates. The high inflation rate is consequently after the
prices of all commodities and services. In this context, inflation has caused prices of goods to rise with
the inclusion of used cars. Economists, however, do not have clear confirmation on when inflation drops
might drop in 2024; that is a signal to brace for more.
Will the price of used cars drop in 2024?
2024 is now the third year after the pandemic struck the world and caused disruptions in the
automobile sector. Prices increased for used cars, which is still the trend. However, you might ask
yourself whether this trend will end or continue. Well, economies predict that prices of used cars may
begin to drop but at a slow rate. Right now, the supply chain is gaining stability and control. Conversely,
semiconductor chip production is rapidly picking pace, and soon things will catch up.
Eventually, used car prices will drop back like the pre-pandemic time in a few years ahead.
Conclusion.
New cars are almost becoming scarce, and most car enthusiasts are shifting to used cars. Sadly, used car
prices are no longer the same. The prices have doubled, and the used car stock is almost diminishing.
What a time to be alive and witness such disruptions in the automobile sector!
The good news from economists is that according to future forecasts, used car prices will return to
normal. Already, in 2024, we have seen a small drop in prices. However, as the days on, changes will
occur that will reduce the prices of used cars as before.