Used car and trade-in prices skyrocketing as demand increases

Used car prices have jumped over 20 percent since April 2020

LINCOLN, Neb. (KLKN) – If you’ve been looking to buy a used car or trade in your current one, you may want to do it now.  Dealerships are seeing less cars in their lots.

The biggest cause behind this is a microchip shortage that has been an issue throughout the pandemic.

“It’s kind of tough for customers because they come in expecting to see a lot of options to choose from, and when they come, we don’t have quite as many vehicles to choose from as we used to,” Anderson Ford owner Mike Anderson said.

Thousands of cars are sitting in factories waiting for microchips, the technology that controls tasks in your car like power steering, automatic braking and even rolling down your windows.

The chip shortage started when people stocked up on electronics during the pandemic and some of the factories overseas that make them shut down for a period of time. Add to that, Some car manufactures in the U.S. changed their assembly lines from making vehicles to making ventilators.

As a result, demand is higher than supply and at the same time trade in value is skyrocketing.

“Your used vehicle is never going to be worth more than it is right now,” Anderson said. “It’s really hard to find inventory.”

The U.S. Bureau of Labor Statistics says used car prices have jumped 21 percent since April 2020. At the same time, new car prices have risen by just two percent.

Anderson says they’ve been able to keep up with demand, but selection is limited. The dealership just opened another location which has been another hurdle as well. The owner is confident things will pick back up soon.

“June here is probably going to be the low point for us inventory wise, so from here forward we’ll really start to see inventory pick back up toward the second half of the year.”

Anderson added June might be a tough month to get your hands on a Ford truck, and July will be the same for all other models.