MILWAUKEE — The coronavirus pandemic has affected yet another area of life: the prices of used cars.
They have risen dramatically over the past year due to a long list of factors.
Like thousands of businesses across the country, car manufacturers had to shut down for several months, making new vehicles less available. Furthermore, demand decreased because of safer-at-home orders and more people working from home.
Public transit use has also decreased due to COVID-19 concerns. Overall supply of vehicles decreased as well. These factors created a market for increasing the prices of used cars.
As spring nears, purchasing one will become top of mind for many.
“That’s due to a lot of things,” said Bill Sepic, CEO and President of the Wisconsin Auto and Truck Dealers Association. “People will be getting their second stimulus check, they’ve saved money during the pandemic, and they’ll be getting their tax return too.”
Auto industry analytics company Co-Pilot released a report in mid January of 2021, showing the average used car price increased 4.83% in Wisconsin. That data is from June to December. That number is nearly on par with the national average of 4.9%.
Automotive News reports nationally, used vehicle prices increased 1.23% last month compared to December. It reports news vehicle valuations increased a staggering 15% since January 2020.
“Do we have dealerships out there, new and used, that have lost money throughout 2020? Most definitely…,” Sepic said. “Do we have dealerships that have made it up in servicing because people are taking care of what they already have? Yes.”
Despite a sometimes shocking sticker price, Sepic reassures consumers the industry is strong and prices continue to ebb and flow.
“In turn, what this has done is drive the price of your trade-in up too,” he said.