Amid rising inflation, people in the United States are finding that buying a used car is not necessarily a sure way to cut costs, as used car prices have risen 30.4% over the last year.
Online car sales search website iSeeCars.com attributes the rising prices to a microchip shortage plaguing the automotive industry.
As of March, used cars were selling for an average of around $8,000 more than they did in the first quarter of 2021.
Connecticut leads used car prices, with an increase of 35.2% compared to last year, while Wyoming had the smallest increase, with prices rising 18.9%. Of the 10 states with the highest increases, seven are coastal states.
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The average list price for a used car in March was reportedly $27,246, down from a record $28,193 in December.
“The anniversary of the chip shortage — when prices started to skyrocket — is approaching,” Cox Automotive senior economist Charlie Chesbrough said, noting that once the anniversary has passed, year-over-year price comparisons will not look as dramatic. “However, prices will not go negative. Rather they should return to more normal growth trends but from a higher base.”
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Although the demand for used cars remains high, sales have slowed recently. However, Cox Automotive predicted sales would increase as people receive their tax refunds.
More than 1.8 million sales of used cars between 1 and 5 years old in March 2021 and 2022 were analyzed by iSeeCars.com, the website said.