If you have been shopping around in the used car market in recent months, it is understandable if you have been a little shocked at the prices you are finding.
There has been a dramatic rise in prices in recent times largely due to a surge in demand following COVID-19 along with the global chip shortage, which has brought the production of new cars down and led more people to the used car market.
Demand
The key reason why used cars are at an all-time high right now is the surge in demand.
All goods rise in price when demand surges only to be magnified when issues such as supply shortages arise.
Many people were unable to change or upgrade their vehicles during the COVID-19 lockdowns resulting in a flurry of activity in 2022 from pent-up, post-pandemic demand.
To complicate matters further, the global chip shortage has stunted the production of new cars, which has driven more people to the used car market and further pushed up demand.
Popular brands, such as used Vauxhall cars for sale, have been in the highest demand due to their sophisticated design and reliability.
Are Surges Coming Down?
While demand was soaring earlier in the year, this has since cooled down with used car sales plummeting by almost 19% in the second quarter of 2022.
There are a few reasons why this might be, including the rising costs of living, the fuel crisis and the fact that many motorists are now wanting to purchase electric and eco-friendly vehicles (with limited supply in the used car market).
Demand appears to be fizzling out, which means that prices could start to fall in the coming months for used cars.
Used Cars Still a Better Option
Although prices are high right now, the used car market is still the best option for motorists looking to make a change.
This is because the semiconductor shortage is still causing havoc in the new car market, which means that prices are high and wait times are long.
The used car market is still a sensible option because it is cheaper, you can get more for your money and depreciation is not an issue.
Just be sure to be patient, shop around and always buy from a trusted seller.
It is a tricky time in the auto market right now as you are looking at high prices in both the used and new markets.
Demand is driving prices up from pent-up demand from COVID-19 along with the global chip shortage, but it appears that this demand is now falling and the cost-of-living crisis will cool off demand in the months to come.
If you are in the market, the used car market can still be a good option and a great way to save money compared to buying new.
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