Question of the Day: What has happened to used car prices over the past year?
Answer: 21% increase
- Do you know anyone who has looked to buy a used car recently? What was their experience like?
- Why do you think that used car prices have risen?
- Is there a substitute available for consumers looking to buy cars?
Behind the numbers (Consumer Reports):
According to the U.S. Bureau of Labor Statistics, used-car prices have jumped 21 percent since April 2020—10 percent of that increase was in April 2021. That compares with a 2 percent increase for new cars over the same period.
A month ago, the relatively high price of used cars was pushing many car buyers toward new cars, but now that a global semiconductor shortage has prompted many automakers to slow or pause production, new cars are more scarce. Now even rental car companies—many of which sold off vehicles during the nadir of the pandemic last year when car rentals and travel in general plummeted—are buying used cars just to bring their fleets back in line with rising demand.
About the Author
Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.
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