COVID Pandemic Has Caused Used Car Prices to Skyrocket
Posted on behalf of RizkLaw on Oct 05, 2021 in Auto Accident
The COVID-19 pandemic continues to create changes in our lives even after over a year. Statistics reported by the National Automobile Dealers Association show a 12.5% increase in used car prices in the last year. The demand for used cars is a great business deal that can make a considerable amount of profit for sellers. However, buyers are struggling to find affordably priced and safe used cars.
Analyzing the used car market shows us a perfect example of how the pandemic still impacts the lives of many U.S. residents. While some individuals may think that high used car prices are simply an annoyance, studies show that this sudden inflation is an economic problem that burdens American household budgets significantly.
How Has the COVID-19 Affected Used Car Prices?
Many contributing factors affect the disruption of the used car market. However, the main point is that there is a high demand with a limited supply of resources. As the pandemic occurred and gave many the incentive to purchase cars, the number of new and used cars available decreased.
The following are a few components of this sudden limit in supply:
Vehicle Chip Shortage
In the spring of 2020, automobile manufacturer plants temporarily shut down for the safety of their workers. The brief shutdown created a shortage of semiconductor microchips that are essential for vehicles. Automakers are having to adjust their production schedules due to the supply crunch. With fewer new cars on the market, the effects rain down upon used car prices.
Many individuals express their concerns about carpooling and taking public transportation for fear of contracting COVID-19. As more stores and businesses reopen, employees are looking for ways to travel to and from work safely. The more people looking to purchase a car instead of using other transportation options amplifies the demand for affordable vehicles.
Many U.S. residents received relief checks during the pandemic, and many put that money into purchasing used cars. With concerns for safety and interest in having a vehicle in case of an emergency, people were looking for ways to purchase an affordable car with the money they received from the government.
The demand for used cars is still at an all-time high, and concerns for the long-term effects this shortage will create on the economy continue to plague the minds of economists and government representatives.
What Are the Risks of This Increase in Used Car Prices?
Not only does the shortage affect the economy, but the safety of those purchasing used vehicles and drivers on the road. More people are on the road than ever before, and the lack of affordable cars on the market force many into unavoidable, dangerous situations.
- Purchasing less reliable vehicles: Because affordable cars are challenging to find, many people have to buy older vehicles that are less dependable and may have more faults.
- Reliance on rideshare options: While people want to buy vehicles, the rising prices make it almost impossible for many individuals to buy their own car. Instead of using public transportation, many people take advantage of Lyft and Uber, which increases the number of people on the road.
- Increase in challenges for the unemployed: For unemployed individuals, purchasing a car is essential when finding a job or accessing employment opportunities like Uber Eats and Doordash. Without the ability to buy a car, many have to rely on other options.
- Economic disruption: The problems within the used car industry don’t just affect automotive sales. Household budgets are changing and impact the ability to purchase other non-essential goods. These changes are causing butterfly effects all over the United States.
With more vehicles on the road, some of which are unreliable and dangerous, there’s a great risk of suffering from severe car accident injuries. If you find yourself in a difficult situation due to someone else’s negligence, contact a car accident attorney as soon as possible.
Contact Rizk Law for an Experienced Oregon Attorney
Without a moment’s notice, you may find yourself suffering severe, life-threatening injuries after a car accident. Not only can you require expensive medical treatment, but you may need a new car after the accident. With the help of a dependable Rizk Law lawyer, you’ll have the opportunity to seek compensation for the harm caused by the other party.
Our accessible communication and positive testimonials offer individuals reliable representation and legal advice. We want to make sure you have the best possible chance at recovering the compensation you deserve.
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