Why the Price of Used Cars Jumped in 2020
Explaining Used Car Price Increases
If you haven’t shopped for a new car in a while, then you’re going to be in for a few surprises. The first major one is that cars are now being built with more safety and convenience features than ever before. Technology is always getting bigger and better, so it should come as no surprise that the same is being applied to our vehicles. The other big surprise is that vehicles are now more expensive than ever, especially if you’re looking at a newer model car, truck, or SUV. The price hike isn’t exclusive to newer models though. Some of it is based on the market.
In the following blog, we’ll break down the reasons why we saw the prices of cars jump up in 2020, and how you can best plan for your upcoming vehicle purchase in the new year.
Updates in Vehicle Technology and Safety Features
A car company wouldn’t be doing its due diligence if it wasn’t continually improving its product. That comes in the form of optimizing or adding new safety features to reduce the chances of driver injury or fatality in the event of an accident. It also means adding features meant to make driving more convenient and enjoyable. Some of the most popular ones are Bluetooth connectivity for pairing smartphones, satellite radio, back-up cameras, on-screen navigation, hands-free assistant, and many more.
With all these modern conveniences, driving is far safer and being stuck in traffic is no longer a slog. Most people now view car rides as a chance to get caught up on their favorite podcast or listen to a chapter in an audio book. You can easily make the case that cars are mobile entertainment centers in their own right, and this is a big reason why they’ve become so expensive as of late.
All these new bells and whistles that we love so much – they cost money. So if it’s been a while since you’ve shopped for a car and find yourself getting sticker shock, you can blame part of that on the features. “New and improved” usually equates to more expensive.
Supply, Demand, and COVID-19
We all know the basic rules of supply and demand, right? If there are a lot of used cars on the market, but nobody is buying them, then consumers are going to see lower prices and have more room to negotiate. This was not the case in 2020.
A good portion of typical new car buyers in 2020 opted to be more conservative in their vehicle purchases, going with a used car to save money during a time of financial uncertainty. The other event that threw the vehicle industry for a loop was COVID-19, which effectively shut down the production of new cars being manufactured for a time, causing a vehicle inventory shortage of new cars. With a shortage of new vehicles, this meant that car sales departments were pushing more used vehicles. The combination of these events pushed the prices of used cars way up.
Although tough for buyers, this was fantastic news for anyone looking to sell their used car because it meant that they could get more money for it than what Kelley Blue Book values were estimating. A used recent model car in good condition can catch a very good price right now on the open market.
Shop for Your Used or New Vehicle at Auto Bank
If you’re in the market for a new or used vehicle in 2021, the team at Auto Bank can help you find the perfect car for your budget with all the features you need. We carry all the finest brands including Honda, Kia, Chevy, Toyota, Volkswagen, and more. We have some of the largest inventory in the Kansas City area.
And did we mention we’re a buy here pay here dealership? This allows you to leave the showroom floor with your car immediately after making a payment. We don’t care about your credit rating just as long as we know you can make your monthly car payment. We make car buying easy for anyone.