The reason is the same – the rise in prices for used cars in the United States itself. Thus, as stated in the report of JD Power analysts dated May 27, due to the shortage of new cars (more on this below), there is still high demand for used cars, which, in turn, leads to an increase in the cost of the latter.
Specific figures are given: wholesale prices for used cars over the past 20 consecutive weeks have risen by an unheard-of 37 percent, retail prices – by 15 percent compared to prices at the end of 2020 (at the same time, the US Bureau of Statistics stated that prices for used passenger cars and trucks in April 2021 increased by 10% compared to March and by 21% compared to April 2020; although Cox Automotive analysts have different statistics on an annual basis – price increase by all 30%). JD Power predicts that the trend towards higher prices for used cars will not only continue but will also intensify even more in the foreseeable future.
As experts note, to meet demand in the American market, about 1.5 million new cars are missing. The shortage is associated with problems that have plagued automakers since last year – in 2020, many companies had to close factories for a long time due to the coronavirus pandemic, and already in 2021 – to face the global problem of a shortage of computer chips. As a result, those Americans who want to buy a car simply do not wait for a new car and go to the secondary market.
In addition, demand for used cars in the US has grown for another reason – those people who used public transport before the pandemic have sharply changed their minds and now are massively acquiring "iron horses" in order to avoid unnecessary contacts in crowded places and to hedge against the introduction of another strict lockdown accompanied by movement restrictions.
Interestingly, the US authorities are closely monitoring prices for used cars, as they are one of the main drivers of the growth of the consumer price index (that is, the rise in price of used cars is considered as an indicator of the upcoming inflation trend). If price growth continues and spreads to other sectors of the economy, the United States may face a prolonged period of economic turmoil for the first time in decades.
