The pandemic has touched all facets of life. From work to play and school, the usual way of doing things has been changed. Different industries have been affected too, and for those looking for a new car, the question should be whether car prices will get better.
It was in April when news outlet Bloomberg reported that car prices — used car prices, to be specific — are facing a collapse. It was a result of certain factors but mostly because factories have been shut down and new vehicles cannot be moved by interstate and local car movers immediately. Any industry connected to cars had suffered following the sudden closures that happened.
This is a look at what has happened since then. Did used car prices reflect the situation with the reports? Let’s see.
Used Car Prices on the Rise
The predictions of the publication may have been true. Prices have gone up, but they’re significantly better back in April or May, during the start of the pandemic. It may have had something to do with the panic to make more before the uncertainty of the situation started to roll in.
The good deals have since gone, and this month’s (and year’s) prices have started to go up due to inflation. Auto auctions closed and their inventory added to the massive surplus in supply. With that excess inventory, used car prices were affected.
With the economy slowly starting to return, these car stores have also started to return. That also means prices have started going up, with a substantial rise seen as more and more vehicles have been sold through once-closed car dealerships.
The Need for More Profits = More Inflation
With new car inventory still lacking, that means car dealerships will still have to rely on their used car counterparts for profit. That is the belief of experts, and they also expect car dealers to significantly mark-up their vehicles. A car that’s averaging a $4,000 mark-up might get anywhere from $6,000 to $10,000 in addition.
With prices like this, you need to make sure that what you’re paying for is a fair price. When buying cars, you have to do your due diligence; it’s your hard-earned money and you have every right to make sure you’re getting the exact value of something as premium as a car, used or new.
Low Prices Might Be Hiding Something
Doing your due diligence is only part of the battle. If you did it and you get a price that’s more or less close to what you have, it’s not a guarantee that you’ll get whatever you think you paid for.
The drop in prices is just that — a drop in the advertised price of the car. Car dealership owners, however, have their own ways of making back that significant discount. There might be a reduction because of the sales volume but there will still be an aggressive effort to make profits from people who do buy from the dealership.
Have an Idea of Your Car of Choice
Even when buying cars are moving online, you’ll want to study up for your car of choice. Even the age of coronavirus shouldn’t stop you from choosing the perfect car, even online. Potential buyers can choose from any model of car available online.
Car sellers would also try to make more profit by offering you a more expensive model or a less expensive one that’s selling like hotcakes. If you’ve done your study before buying, then you won’t fall for the sales pitch, since you come in with an idea of what car you really want to buy.
Know that Inflation is Everywhere
During the pandemic, it’s not because dealerships and used car lots are selling cars because they want to make a profit — it’s like that everywhere. There was a long period where businesses were dormant and both dealerships just want to at least get back what they lost during the time.
This is not a buyers’ market, but if you’re badly in the market for a car, you should know that the lowest prices might not even be within your budget. That’s how the pandemic market works. Bargain hunters should be more patient in choosing the best prices or wait for the market to even out.
Buying a car during the pandemic, even a used one, can prove to be way above your set budget. If you really must buy, then do your own research. Try to choose a great model that won’t let you down when you really need it. Balance price and quality, then decide if you really must buy that car now or wait until things become more normal.