When a person needs a new car, they often look at brand-new vehicles first. Once they see how prices have risen over the past few years, they may turn to the used car market to see what is available. The used car market has picked up in recent years and it is easy to see why.
The Used Car Market a Decade Ago
America saw a recession from December 2007 to June 2009 thanks to a housing crisis and the effects it had on the banking industry. When the recession ended, people turned to used cars because they offered more value and came with lower price tags. This trend continued even as the economy improved.
Prior to the global pandemic, used car sales were outpacing new car ones by a rate of three to one. In 2019, 40.8 million used vehicles were sold. Only 17 million new vehicles were sold that year. Lease returns combined with high-interest rates and rising car prices led to people buying used more than new.
The Pandemic and Its Effect on the Used Car Market
The global pandemic significantly affected the automobile industry. Auto manufacturing in American declined by 99 percent when the pandemic first swept the country. As new cars were in short supply, people turned to the used car market when they needed a new vehicle. Used car sales reached a monthly average of 150 by the end of the year for the city average.
At the same time, used car prices started to climb. In the first two years of the pandemic, they rose by 17 percent. However, people still chose a personal vehicle over public transportation or rideshare services, as they were worried about being infected with COVID.
Where the Market is Now
People aren’t buying cars at the rate they did during the pandemic and they are taking longer to find the perfect vehicle. At the same time, prices continue to rise, and experts don’t see these price increases slowing until the end of the year. Some industry insiders believe they may even start dropping. However, it doesn’t appear they will ever go back to pre-pandemic levels.
Used Electric Vehicles
Many drivers today are looking at electric vehicles to help offset high gas prices. In fact, the electric vehicle market is seeing record sales. They have climbed 60 percent year-over-year since 2021. Manufacturers are competing for business to see who will come out on top.
Drivers find there are many benefits to purchasing an electric vehicle. The driver won’t need to visit the gas station anymore, so fluctuating gas prices won’t be of concern. Government incentives are another reason people look into electric vehicles. However, every person should research the battery life and degradation of a make and model, as they vary greatly.
Regardless of which used vehicle a person chooses to buy; Consumer Portfolio Services may be of help. This company works with individuals with bad or limited credit who might not be able to secure a loan otherwise. In addition, it works with low-income individuals in need of a car today. Learn more about this company and how it operates to see if this might be an option when buying a car in the future.
