Why are used cars so expensive?

[ergophobe]

Before the pandemic, I believe we had a thread about how used car prices were about to plummet. It had to do with the number of cars coming off lease and the technology changes (both electrification and also driver assist features) that lower the value of used cars.

So... that didn't happen



https://www.npr.org/2021/06/11/1005600579/used-car-talk
https://www.economist.com/graphic-detail/2021/06/15/why-the-used-car-market-is-sending-american-inflation-soaring

[Rupert]

I have a van to sell.  Its 3 years older, and has 80,000 miles on it from when I bought it.  I am looking to get the same price as I paid for it.

some computer chips are in short supply too, and so Ford in Turkey have stopped manufacture I hear.

I also hear that gaming chips are in short supply.  Same one I wonder?

[Brad]

There are 5 car dealerships in my town: Nissan, Ford, Toyota, Kia, Chevy, and all of them are just about out of new cars and trucks.  Used cars are thin on the ground at all 5.  Production is waiting on chips and other supply chain issues.

[rcjordan]

This ain't helping;

http://th3core.com/talk/marketing/vauto/msg51713/#msg51713

[rcjordan]

+

Americans Keeping Cars Longer Than Ever Amid Record Prices

https://www.businessinsider.com/used-car-prices-americans-keep-cars-longer-than-ever-before-2021-6

[ergophobe]

I also hear that gaming chips are in short supply.  Same one I wonder?

700,000 GPUs Shipped to Cryptominers in the First Quarter of 2021
https://www.tomshardware.com/news/700000-gpus-shipped-to-miners-first-three-months-2021

It's more than that though. There are a lot of factors. Early in the pandemic, there was a glut of used cars, but that has reversed for many reasons. In no particular order

- chip supply limiting new car production. In the podcast, they interview someone who said that one of the big carmakers has a parking lot of some SUV (Ford Explorers? I don't recall) that are missing just the chips.

- other supply chain disruptions due to Covid restrictions.

- The rental car companies liquidated a lot of their fleets early on, especially with the Hertz bankruptcy. As travel reboots, they are not turning over their cars. They are trying to rebuild their fleets, so rather than one car in, one car out, they are just adding.

- People were afraid of public transit, so those who were not doing WFH upgraded their cars early in the pandemic, often using their stimulus checks, so they absorbed that glut of rental cars and cars off lease, but now they have decent cars they don't need to change over.

- There were others who upgraded their cars because, between the $600/mo in extra fed unemployment money and the stimulus checks, a lot of laid off low-wage workers got huge raises that let them finally upgrade that old clunker.

[Rupert]

more on chips in cars
https://www.nytimes.com/2021/01/13/business/auto-factories-semiconductor-chips.html