Your Car Might Be Worth More Than You Think
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Used vehicle prices just keep climbing.
Welcome to 2020, the year where everything seems to be changing, for better or worse. One thing that we keep watching with great interest is the used car market, where values continue to rise. Just when we thought it couldn’t get any crazier, the US Bureau of Labor Statistics confirmed what we’ve been seeing: used vehicle price inflation is outpacing everything else in the country. Yes, that means your old car is probably worth far more than you realize, so if you’re looking to unload it to make space or just get some cash in your pocket, now might be the time to liquidate it.
For those who care about the numbers, the US Bureau of Labor Statistics reported on October 13, 2020 that the Consumer Price Index for All Urban Consumers increased 0.2 percent in September on a seasonally adjusted basis. The majority of that increase was from used car prices rising dramatically. In other words, the big driver of inflation nationwide at the moment is used vehicles.
There are a number of factors fueling the rise in pre-owned car prices, and all of them can be traced back to the COVID-19 shutdowns. With factories idled and/or production reduced severely as concerns about workers being close to one another and transmitting the virus rippled through society, both vehicle component and car production plummeted. That meant few new vehicles replacing those used ones which are no longer usable.
With the scarcity of new vehicles and components, plus people who were laid off and furloughed, plus cars sitting outside unmoved for days at a time, criminals saw the opportunity to cash in by stealing cars at rates we haven’t seen in years. That problem of rising vehicle theft has only worsened as the year has continued, so we’re definitely not out of the woods there.
Also, with people losing their jobs, being furloughed, or just feeling concerned about their future employment opportunities, more car shoppers are looking for something used than new. It’s a way to save money and when there aren’t so many places to visit because everything’s shut down, having a brand new car doesn’t seem so attractive anymore.
Yet another factor is driving sky-high demand for used cars in 2020: fear of catching the virus from public transportation. People who normally would ride a train or bus are now buying cars. Same goes for taxis and rideshare services like Uber. Sure, not everyone is avoiding these transportation options, but a lot of people are.
Obviously, we don’t know what the future holds, so there’s no telling if used car prices will keep going up or will level off. So far it’s been the former of the two and there might be no end in sight.
Source: US Bureau of Labor Statistics
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