The American car market is a hugely competitive industry. With so many auto manufacturers competing with each other, and still we have a strong increase in prices for 15-30% in different car segments. The dramatic change to the new car market is due to many different factors, but the two most notable are the recent recession in the USA in the first two-quarters of 2020 and increase of the prices for the microchips, the components, which are in great demand within the IT hardware companies and car manufactures. This price jump influenced the new car costs and mirrored the prices for the used cars. And in 2022 we have the paradox: selling the 3 year old car can be profitable in comparison to the initial price, which you paid years ago.
The other major factor that’s changing the new car market is the recent recession. When people lose their jobs, they often also lose their benefits – including corporate vehicles, which can drastically change their quality of life. One way people are trying to get back on their feet post-recession is by buying a used car instead of saving up for a new one. The used car market has been growing in the last three years while new car sales have dropped. This means there is more competition for consumers looking for a cheaper option when it comes to used cars. And to understand what is a fair price for the used model became even more complicated.
However, there are some ways to check if you’re getting a fair price. For example, you can compare the prices at the used car dealerships near you. Check online car value on prominent domains like KBB. Be sure to take into account the condition of the car and the trend for the same model on the new car market, to evaluate all these factors, it’s better to compare the KBB price with the estimations from several used car dealers domains.
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In the last 10 years, vehicles have been increasing in price. It’s been a steady increase in price in recent years, averaging from 3 to 5 percent a year within pandemic time. The average price in 2011 was around $30,000 and by 2025, it is projected to rise to over $50,000.
Tips for Shopping for a Used Car
- Do your research – Use online resources to compare makes and models, check reviews from other drivers, and pay attention to the National Highway Traffic Safety Administration (NHTSA) website for safety ratings.
- Set a budget – Decide how much you can afford to spend on a car and stick to it. Remember to factor in insurance, registration, and maintenance costs.
- Inspect the car yourself – Take the time to look over the car thoroughly before buying, checking for any damage or signs of wear and tear.
- Get a mechanic’s opinion – Have a trusted mechanic take a look at the car and give it a thumbs up (or down) before you buy.
- Consider financing – If you don’t have the cash to outright buy a used car, consider financing options available through banks and credit unions. And use this online calculator to estimate the additional payment.
All in all, the used car market is a great way to save money and get the car that you need. It is important to do your research and to know what you’re looking for when shopping for a used car.