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Each year, automakers release their latest vehicle models. The public gets excited when automakers launch new models or concepts. We are now in these tough times, where the auto industry was affected by this pandemic. In fact, sales of new cars have dropped from their record highs – read more?

They continue to purchase vehicles, but no longer brand new. The used car market suddenly starts to boom. The used car market has risen by 30% in just one calendar year.

Price increases

The second-hand vehicle market is booming. It’s up by nearly 30 percent from last year. This market is saturated by cars, trucks vans and even electric vehicles.

In recent years, brand-new vehicle sales have surpassed those of used vehicles. In 2019, the new car market only sold 17 million vehicles, while the used vehicle market sold 40 million.

The price of gasoline has been rising rapidly, but so have the prices of brand-new cars. They increased by 7 percent. The pandemic has been a significant factor in driving up car prices. It has also had a ripple affect on the automotive industry.

Pandemic hit even rental car agencies hard. In order to compensate for lost revenue, companies were forced by strict travel restrictions to sell off their vehicles. Now that the government has rolled out vaccination, many people have been inoculated. Although travel is on the rise, rental car agencies continue to face a vehicle shortage. There aren’t enough vehicles and rental companies have to relocate their cars in order to satisfy the demand.

Chip shortage

Semiconductor Chips are used not only for the manufacture of automobiles but also in consumer electronics. The demand for products such as video game consoles and computers, along with appliances, has increased dramatically. Homeschooling and working from home are government-imposed measures to reduce the number of people using public space. This increased demand for electronic devices.

The auto industry was the hardest hit by the shortage. Microchips are essential for vehicles as they form part of their computer control and driver assistance systems. Auto manufacturers are struggling to find more supplies. Not only were they competing with each other, but also other players from different industries.

In the third quarter and the fourth quarter of 2020, demand for semiconductors chips was higher than what the microchip makers could produce. The result is that they are facing a backlog in orders, which continues to exceed global supply.

Ford and Volkswagen were forced to close down certain factories, limit vehicle production, and lay off workers. Some automakers are concerned the disruption will last well into 2022.

Due to the delay in production, people are now looking for alternative options. Due to the shortage of microchips, secondhand vehicles became increasingly popular. Secondhand car prices reached record highs due to the reduced production of brand-new vehicles.

There is a shortage of pickup trucks

According to some experts, the shortage didn’t start when the global chips shortage occurred. Many people are interested in buying new pickups before the COVID-19 virus becomes an outbreak during the first quarter of 2019.

Only pickup trucks were affected by the supply issue. Other vehicle types, like sedans and vans, were not affected. Sales were record breaking for pickup trucks. Dealers did not anticipate the rush of customers and so had to sell their stock. By the end of the month of May 2020 the inventory for pickup trucks was almost depleted.

The auto industry had to deal with another issue before it could recover. This situation was made worse by the microchip supply shortage, which was piled on top of another shock in truck supplies. The truck supply is not enough to replace the declining inventory and new orders for pickups.

Used cars are on the rise, while new cars are falling.

According to Consumer Price Index, used car prices soared up to 21 percent by April 2020. The used car market has seen a 10% increase in April 2021. While there is no constant flow of new vehicles from dealers, the demand for used cars is still increasing.

They are interconnected and work together, despite the fact that the used car industry is much larger than the new one. Sales of new cars took a huge hit, which had a significant impact on market supply. Rarely do people end auto leases or trade in their cars.

The used-car market relies heavily on the cars they purchase from their customers, those trading in old cars as well as those returning leased vehicles. In addition to that, the used car market also relies on the stock of the dealers.

Although the prices of used cars have risen, sales of used-EVs continue to grow at a slower rate. Tesla is the company with the lowest price increase year-over-year, just below 6 percent. Electric vehicles can be a good alternative for people who don’t want to buy fuel-powered vehicles. A shift in consumer tastes is one factor behind the increase. Sales are increasing month-on-month. The increase in EV prices in May 2021 was 5.1 per cent, up from 1.1 per cent in March.

Selling second-hand vehicles

The market for second-hand cars is now different than it was before the pandemic. The price of a second-hand car today is higher than that calculated by iSeeCars – an automotive search engine and website for research.

Some dealers call customers who purchased new cars just a few years ago and ask them to return the vehicles. Sell it immediately if the car isn’t what you wanted. The value of your vehicle will be lower if you sell it during the pre-virus period. The average price of a used car has increased by almost 30% since last year.

It’s possible to earn money from a vehicle you don’t use or need. The value of your vehicle depreciates each day, even if you only keep it in the garage. Today, pickup trucks, convertibles and coupes are in high demand.

You can sell your car for more money if the parts are in good condition. Install a tonneau or change your old tires and wheels on a truck. Nitto tire has different series of tires for your coupe or convertible. They include Trail Grapplers (for convertibles), Motivo (for coupes), and Neo Gen.

Buying a used car

You can certainly find a number of used cars online or through a local dealer. But it’s not always easy to find an excellent used car. Do not buy a secondhand car too fast, because it may have been damaged by floods. You can find them on the used-car market. Since the market is hot right now, you should be very careful when choosing a car.

You can make the best of your situation by negotiating different deals on your vehicle. This can be leveraged when you go car shopping. Ask a mechanic to help you determine whether the vehicle is worth purchasing.

New car market out of reach

Even though people would be willing to pay top dollar for brand new cars, automakers are unable to meet the demand. The automakers are only able to offer a small number of products, such as vehicles or parts through pre-orders and reservations.