Jumps in used car prices have some first-time buyers hitting the brakes as supply chain breakdowns continue to choke production of new vehicles.
Over the past year, the average list price for a preowned vehicle jumped 31%, according to Cox Automotive, while data from J.D. Power show the number of 16- to 25-year-olds buying a car declined 35% from 2019 to the end of 2021. Comparatively, prices for new vehicles year over year rose 12%.
Illinois Automobile Dealers Association Executive Director Joe McMahon said last year saw a record appreciation in the value of used vehicles and it pretty much all comes back to the microchip shortage.
“With that shortage, manufacturers are producing less vehicles while the consumer demand for these vehicles are high, so the price of new vehicles have obviously gone up,” he told The Center Square.
The chip shortage combined with pandemic-spawned labor shortages snowballed over the past year and a half, McMahon said.
In January, the average list price of a used model hit $28,500, the Wall Street Journal reported.
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