Used car prices at record high, chip shortage and high demand to blame
Looking to buy a used car? Consumers can expect high costs and low inventories at the dealership lot.
Listing prices for used cars in January were up 40% from the same time last year, according to Carfax. The company said the average listing for a used car is currently $28,000 – a record high.
“Historically you’d think of that as the cost of a new car,” Emilie Voss, director of public relations at Carfax, told ABC News. “We've never seen a number like that for average price for a used car nationally.”
According to Edmunds, the price is even higher: its data showed the average price of a used car is currently $29,594, up 30% from the year prior.
The ongoing global microchip shortage is to blame for rising costs. Manufacturers cannot acquire enough chips to keep production lines running and the demand for used cars is high.
“We're seeing record prices and part of that is a severe lack of used car inventory,” Voss said. “What we hear about with the car chip shortage impacting production, that is trickling down to used cars.”
For consumers who can afford high costs, you’ll have to act fast. Experts at Cars.com said vehicles are moving off dealer lots within a week, when pre-pandemic it could take 30-60 days before they sold.
Once you arrive to a dealership, experts say it’s important to keep an open mind. Consumers may have to compromise on their wish lists and expand their search when looking for a used car.
“Say you want a 2019 white Ford Edge. You're going to have a harder time finding that specific vehicle than if you were to broaden your search and say I'm open to just really any midsize SUV,” Voss said.
Consumers though might see some relief later in the year.
“There are headwinds right now -- new car supply is projected to get better in the second half of the year and consumer demand has slowed recently due to the recent COVID spike and high used car prices,” Voss said.
While the market is competitive, Voss said consumers can still negotiate on price.
“Use the vehicle history if price is an issue for you,” he said. “A vehicle history report you can tell if a vehicle is well maintained [or] if an accident was minor or severe.”
ABC News' Sam Sweeney contributed to this report.
