New car prices, used car prices, and inflation has been on the rise for the better part of two years. But, according to evidence in the used car market, that might be coming to an end. Does the fall in used car prices indicate a recovering economy? Experts have their say, but only time will tell.
The used car market has skyrocketed over the last two years. Since the beginning of 2020, when the Covid-19 Pandemic changed just about everything, the market for new and used cars has been erratic and unpredictable. Used cars, which have grown in popularity over the past few years, have risen in price to unexpected heights. This was due to the lack of supply of new cars. Therefore, the demand for used cars ticked up, as did their price tags. Customers opting to buy used instead of new found themselves paying over 70% of a used car’s actual value. But this is coming to an end. Finally, the prices of used cars are slowly cascading down, and this could mean that new cars, as well as inflation itself, could be improving very soon.
Have you found it difficult to buy a new or used car in recent months? Keep reading to find out what is happening to the price of used cars and what this means for inflation.
Used Cars A Direct Cause of Inflation
While used cars have been very popular in the past couple of years, this has only been a symptom of a much bigger problem. Used cars for sale became popular due to the lack of supply for new cars and dealerships alike. This drove the price for used cars up and up and caused inflation to get even worse than it was becoming.
Americans rely heavily on personal transportation, so cars are a needed commodity. When cars are more expensive than usual, the American people suffer. For inflation to improve, to heal, in a sense, the market for used cars and new cars must improve. That is a fact.
Hope for Cooling Inflation
But don’t despair! There are good things happening right now. Although the automotive market is still somewhat volatile, the market for used cars is improving. Meaning, used cars are finally beginning to cost less.
With supply so low, dealerships in America started raising their prices, but this only made inflation worse. With the right timing and better supply, demand for used cars has begun to lessen. This has caused the price of used cars to fall. All that is left now is waiting for inflation to respond accordingly.
This, in turn, might help inflation and the costs of other necessary sectors such as housing, raw materials, food, and other important artifacts. And, if you are just now learning about this and you are planning to buy or sell a used car, now is the best time to sell, and if you plan to buy, just wait a little bit longer because prices are falling more and more each day.
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