This wasn’t what we had in mind when we chose a self-described “car guy” as President of the United States.
Under Joe Biden’s presidency, used-car costs have soared. The cost of secondhand autos has increased by 30% since Biden’s inauguration month. The consumer price index (CPI) for used autos has increased by 45% since February 2020, right before the epidemic started.
The used vehicle price inflationary road has proven exceptionally rough. Prices increased as a result of Americans living farther from urban centers and needing more automobiles, even if supply-chain problems with microchips slowed down domestic and international manufacturing of new cars. Prices dropped down to earth as new automobile manufacturing increased, recession worries increased, and demand was hampered by rising prices for other consumer products, particularly gasoline.
Then, in January, demand once more increased. In one month, the index for used automobiles increased by 10%. Dealers flocked to the wholesale sector, where skyrocketing costs hinted at far greater costs for the consumer market. Prices for secondhand cars increased once more in April and May. In June, they decreased month over month, although they are still quite high.
Affordable secondhand automobiles have all but disappeared from the market due to inflation. According to a survey published by Marketwatch this week, experts at iSeeCars.com examined the pricing of around 11 million used cars that were up to five years old. They discovered that vehicles priced under $20,000 made up around 12% of the used-car market this year, down from a market share of 49% in 2019.
“The inexpensive used automobile, which has all but disappeared from the used car market, is one of the pandemic’s many fatalities,” iSeeCars analyst Karl Brauer told Marketwatch. “In 2019, consumers looking to buy a used automobile could afford more than 20% of the market for late-model vehicles with a budget of $15,000. Currently, they can only access 1.6% of the market with that expenditure.”
For those who are fortunate enough to locate a used automobile under $20,000, they will be driving one with many more miles on it. Brauer claims that used car customers are currently paying 50% more for vehicles that are at least 20% more used.
“An average used car’s mileage in the sub-$20,000 price bracket increased by 46% to 63,457 miles during this year, from 43,541 miles in 2019. Over half of vehicles produced in 2023 will have at least 20% more miles than comparable vehicles sold in 2019,” according to Marketwatch.
Naturally, secondhand automobiles are still around. They have just grown more pricey, that’s all. This is one of the effects of inflation. The prospect of the availability of less-priced alternatives is destroyed.
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