Used car values have risen so much during the COVID-19 pandemic that the low income families are struggling to buy anything that isn’t one breakdown away from the junkyard.
According to new data, the average used car now costs a whopping $29,000, and competition among buyers is so fierce that opportunities to chip sellers down from their asking prices are almost non existent. If you don’t like the price, one of the dozen other interested lined up behind you probably will.
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That $29,000 figure comes from Edmunds and is up a massive 39 percent on the previous year, driven by a lack of supply. Pandemic- and semiconductor-related problems in factories pumping out new cars means fewer vehicles have been registered, so used cars have become a more valuable commodity.
Everyone from regular private citizens to rental companies who would normally buy new vehicles has often been unable to, so have hung on to their existing rides or switched their attention to used cars. The data suggests used prices have jumped a total of 42 percent since the start of the pandemic, putting a squeeze on household incomes which haven’t kept pace.
Edmunds’ Ivan Drury told The Associated Press that the average monthly payment for a used car had grown from $382 five years ago to $413 two years ago and $520 today, far outstripping inflation.
And the boom isn’t just restricted to immaculate two- or three-year old cars, but also much older vehicles, meaning that the kind of pre-owned car or SUV you could have snapped up for $8,000 before the world went into meltdown might now set you back up to $12,000.
Rises like that are tough for average income earners to swallow, but more worrying, they’re in danger of pricing low income families out of the market altogether.
