Used Car Market Surges Amid Microchip Shortage

The current used car market is experiencing unexpected growth, with many recent model cars selling for prices exceeding their original costs due to a microchip shortage and supply chain issues. The shortage of new vehicles has shifted consumer demand towards used cars, resulting in prices being 42 percent higher than in early 2020. As dealerships face tighter inventories, they are offering higher trade-in values, further inflating used car prices. In the U.S., average new car prices have reached $48,039, prompting more buyers to consider the pre-owned market, where vehicles are now seen as reliable even with higher mileage. Additionally, the importance of understanding local market conditions before buying is highlighted, as prices can vary significantly. Analysts suggest that savvy purchasing from service departments can help dealerships acquire desirable used cars more effectively.