While shopping for a car, you may have noticed that the used varieties cost as much or more than the new versions. That seems out of this world because a new vehicle should always cost more. That is not the case at the moment, though. As of right now, used car prices are through the roof. Let’s find out why used cars sell at higher prices now than new cars.
WendellandCarolyn / Getty Images
Why New Cars Are Losing Appeal
Everybody loves to drive a new car. One that has never had another person breaking it in. People who like high-profile vehicles are used to ordering them, then waiting for delivery. Cars such as Hyundai you would not think would ever have to deal with this problem, but times have changed.
- Lack Of Parts – Due to many different reasons, there is a worldwide lack of components for producing new cars. In fact, car makers such as Hyundai and Kia have found themselves behind by over a million orders at one time. This is a considerable amount of orders to try to fill when you cannot get the parts to complete the cars to fill them.
- Covid 19 Closures – Throughout the covid-19 pandemic, there have been manufacturing and production plants all over the world being shut down. They could not keep their doors open for business due to a lack of workers or outbreaks of the virus, causing nationwide shutdowns. What this means to those companies that did stay open is more work to complete with fewer parts. Plus, you throw in the shortage of available workers, and you have a recipe for disaster. It is no wonder that car makers are behind on orders.
- War In Ukraine – You may not think a war in Ukraine would affect the car industry, but it has. The entire world (for the most part) has shut off the supply of materials they used to get from Russia. Getting the exact parts from other places takes time and money, and they are simply not enough to keep up with the orders.
Why Used Cars Are Gaining Appeal
You have probably figured out that new car orders are backed up so far that people are waiting up to a year before they get their cars. That makes the used car business boom.
- Orders Are Backed Up –Instead of waiting for a new vehicle, finding a used Hyundai of the same type you want is more accessible. The problem is that used car dealers are now suffering a lack of inventory, increasing the prices they have to pay for the used cars they sell. That means that the cost to you goes up. Otherwise, the used car dealership would not make a profit.
- Pick What You Want – One of the most appealing aspects of ordering a new car is that you can add what you want to the base model, making it a vehicle designed for you. A used car may not have everything you want, but it will be close. You may even hit the jackpot and find one bought by someone with the same taste as you. Either way, you can get a used car that covers all your needs and wants, and you can buy it right now. No waiting.
It all boils down to the fact that used cars are more accessible than new ones. As the demand for preowned vehicles continues to increase, the prices for buying them will follow suit. The cycle of supply and demand will never change, even if those prices exceed the cost of a new model.
The people buying do not seem to mind. They get their car right now, and those cars can be in good shape as a new one, or even better. There could be things added by the original owner, making it an even better deal than you could have expected when purchasing a new one.