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Published February 23, 2022
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If you’ve been in the market for a new or used car since the pandemic hit in March 2020, you may have noticed a shortage of cars. Supply chain woes have hit a number of industries, driving up prices and helping to fuel inflation nationwide.
The global supply chain challenges have reduced the stream of microchip processors auto manufacturers need to produce new cars. These chips are needed to control everything from infotainment screens to fuel management and stability control.
Scare microchips means fewer new cars as automakers slowed or paused production when the pandemic first started. For the cars that are on the lot right now, dealers are likely offering few pricing incentives.
CNBC reported in January:
“The average transaction price for a new car is now higher than the manufacturer’s suggested retail price, or MSRP: $45,872 versus $45,209, according to the most recent data from Edmunds.” It’s estimated that 89% of car shoppers are paying more than the sticker price or within 5% of it right now.”
The drop-off in inventory isn’t getting any worse, but it will be a while before it gets back to normal. Inventories are expected to remain low for 2022 and prices high, according to CNBC.
Inflation, the new car supply chain woes and higher prices have impacted the used-car market.
High inflation isn’t going away anytime soon, according to Forbes. Prices are going up at their fastest rate since the early 1980s, and rose 7.5% in January compared to the year prior, according to the most recent Consumer Price Index (CPI) report. This marks the biggest annualized growth in CPI inflation since February 1982, Forbes reported in February.
At the same time, searches for used cars are up and a used car doesn’t sit on the lot for long before it’s sold. That means higher prices in a hot market.
Buyers are paying an average of $29,011 for a used car, up 27.9% from a year ago, Edmunds’ data shows. That ranges from an average $14,124 for 9-year-old cars to $30,334 for a 3-year-old vehicle.
While it’s tough to predict the future, KBB.com reported in February that used-car prices have stabilized “at least temporarily, but remain historically high.” Inventory is starting to recover, particularly in the used-car market.
These historically high prices can work in your favor. If you’re considering selling or trading your car, EchoPark can help guide you through the process. And we make it easy, with no haggling involved.
Start by seeing what your car is worth. Get the value of your car in seconds by entering your car’s VIN here. (The VIN is located on the lower-left corner of the dashboard, in front of the steering wheel. You can read the number by looking through the windshield).
If you like our online offer, bring your car in to the nearest EchoPark for a quick inspection. You’ll walk away with a check in hand, or you can upgrade to a new-to-you car.
We have thousands of 1- to 4-year-old cars for you to choose from, each with a CarFax report and a 190-point inspection. Plus we have flexible financing and protection plans that you can customize to suit your needs. And if you end up not loving your new car, you can return it with our 7-Day Money Back Guarantee for a refund of the purchase price.
Get started on your search for a new-to-you car or get more info on trading or selling your car at echopark.com.