Research suggests the chip shortage may start to ease toward the end of 2022, but until then, used car prices are likely to keep rising. (hxdbzxy, Shutterstock)
Estimated read time: 5-6 minutes
WASHINGTON — If you’re in the market for a new car, now might be a tough time to find one. Automakers are still battling semiconductor chip shortages, causing record-low inventories of new vehicles. And along with that shortage comes, you guessed it, higher prices.
The result? More buyers have been pushed into the used-car market, which has raised the demand for pre-owned vehicles, explains Sara Graves, founder of USTitleLoans, an online company that connects buyers with lenders. A recent report from Counterpoint Research suggests the chip shortage may start to ease toward the end of 2022, but until then, used car prices are likely to keep rising, Graves says.
“Prices will normalize when new car inventory normalizes, which is going to take the whole year,” she adds, urging sellers to take advantage of high used car prices and demand by moving their cars as quickly as possible.
Whether you’re a buyer or a seller, here’s what experts want you to know about the future of used car sales.
What to expect from the used car market
The used car market will continue to show high demand in the coming months, predicts Grant Feek, CEO of the used car marketplace Tred. He expects prices to remain strong but more approachable, adding that they’ve moved closer to “normal” ranges in the past few weeks.
As long as global supply chain issues continue to impact manufacturers’ ability to get new cars on dealer lots, used car prices are likely to hold steady, forecasts Jake Mayock, founder of automotive content website tuningpro.co. High gas prices increase the costs of importing and transporting new vehicles, which Mayock says contributes to keeping new car prices up.
Prices will normalize when new car inventory normalizes, which is going to take the whole year.
–Sara Graves, USTitleLoans
But there’s a light at the end of the tunnel, assures Zach Wimpey, operations manager at Craig and Landreth Cars in Louisville, Kentucky. Even after four consecutive months of declining used car inventory levels, inventory rose by 6% at the start of 2022.
Is now a good time to buy, sell, or trade in a car?
With more people than ever working from home, many families don’t have the need for multiple cars, notes Jeff Cole, president of FairLease, an auto leasing company located in Dallas, Texas. So if you have a vehicle you can live without for a year or two, he recommends trying out the market now, capturing equity …….