Car prices are very high right now across the country, changing the way people buy cars amid the coronavirus pandemic.
What are the car prices at the moment?
According to CNN, the average new car in May 2021 cost around $ 38,255.
- This is an increase of 12% compared to the same period in 2020.
- About two-thirds of car buyers ended up paying less than 5% of that number, meaning that even with a little haggling, prices were still higher than a year ago, according to CNN.
Why are car prices going up?
Car prices are skyrocketing right now for a number of reasons. Through CNN, lots of car dealerships have fewer cars than they normally would. So they have increased the prices of the cars they own. Since there are fewer cars available, cars tend to be rarer, which increases their price.
- There is also a higher demand. Sales are increasing because people need to drive again after months of lockdowns and quarantines. Auto dealerships that were closed during the pandemic have also opened, and they have raised prices to help account for losses, according to CNN.
- Also think about inflation. According to NPR, consumer price because everything is up 5% in the last 12 months, which is the biggest increase since August 2008, when prices jumped 4.2%.
Supply chain and cars
One of the main drivers of high car prices is the supply chain. For example, electric cars are hard to come by in Utah right now because there is “a global shortage of high-tech semiconductor chips that have become the mainstay of modern automobile manufacturing,” according to Deseret. News.
- (If you don’t understand this language – because I didn’t understand it – it basically means that the parts needed to make some cars are scarce.)
And that’s not just the case with electric cars. This is the case with so many cars.
- “Prices are being driven up by grunts in the supply chain that lead to shortages of key components such as computer chips for cars, hence the higher price Toyota wants for its pickup trucks,” according to NPR.
Craig Bickmore, executive director of the New Car Dealers of Utah association, told Deseret News that the auto industry will be fine once the pandemic is over. But there is a lack of inventory right now for people.
- “The auto industry is doing well, and we hope to come out of COVID OK,” Bickmore told Deseret News. “The dealers have performed well and we are grateful to them. But what’s happening now is that stocks are tight for reasons that have been in the news a lot – stocks are tight and likely will become a bit more tight as manufacturers fix these issues with chains. supply.
What about rental cars?
OK, so you don’t need to buy or rent a car. But what about rent them for your summer trips? Well, it looks like car rental prices have also jumped, according to WHLT. Renting a car, in some cases, can cost up to $ 300 per day.
And it is also representative of a jump. Through WHLT, AutoWeek data shows rental car prices have jumped more than 30% since 2020 alone.
- “It’s a booming business right now. Everyone needs a rental car, they want to keep miles, so they don’t have to pay as much maintenance, ”said Mona Bullock, car rental consultant at Hattiesburg Cars, according to WHLT.
- He added: “Since January we’ve had a lot more people renting cars, and our prices recently went up about a month ago just because of high demand and trying to keep up with the competition while having always a good price for our customers. “
Will car prices stay high?
Experts have different opinions on the current inflation figures. Through NPR, some experts suggest the prices won’t stop because people have money from savings during the pandemic and stimulus checks.
- “Although we are seeing some inflation, I don’t think it’s permanent”, Yellen said. “We will be monitoring this very carefully, keeping an eye on it and trying to resolve any issues that arise if it becomes necessary. “