The impact of supply chain issues on the automotive industry has pushed new vehicle prices higher throughout 2021. With cars, trucks and SUVs in demand, analysts say similar cost increases are affecting used car lots — with prices up about 30% over the same time one year ago.
Nationwide, that adds up to customers spending about $25,000 for a used vehicle. After increasing early in the year, that number had somewhat stabilized before rising again last month.
“People were assuming that we’d be coming out of the chip shortage and a lot of these new and used car prices would become more normalized.” —Karl Brauer, ISeeCars
Karl Brauer is an executive automotive analyst for ISeeCars. He says while used car prices are higher than they’ve ever been, the average cost in Southeast Michigan is around $23,700, “which is about 3.9% below the national average for used car prices. So Detroit itself is a little below that average.”
Brauer says the overall rise in used car prices is tied to the global shortage of semiconductors. He says with fewer new vehicles available to purchase, fewer used cars are entering dealer lots.
“A lot of people were assuming,” says Brauer, “that we’d be coming out of the chip shortage and a lot of these new and used car prices would become more normalized during winter. But it seems like the chip shortage is as bad as ever and we don’t see any obvious signs it’s going to repair itself.”
Brauer says another sign of the problems dealerships face is that new cars are selling in about 37 days, while used vehicles are rolling off the lot a couple days quicker on average. He says it’s abnormal for used cars to be selling faster than new ones.
Listen: Karl Brauer discusses the used vehicle market.