The 2022 car business has been anything but smooth sailing. In fact, it’s been a roller coaster ride. A continuing shortage of new car inventory has forced dealers to scramble for preowned vehicles. They need to fill their lots and with the shortage of new vehicles, they fill them up with used cars, trucks, and SUV’s. While preowned vehicle prices are now at a premium, you could hit the jackpot if you’re trading one in.
Edmunds, the automotive research company, estimates that the average trade-in value rose $2,920 in Summer 2022 compared to a year ago. Wholesale used vehicle prices increased 3.6% in the first 15 days of September compared to the month of August. Trucks hold the greatest value, and if you’re thinking about trading one in, you’ll get the highest trade-in price right now out of all vehicles on the market.
First – why is there a new car shortage? A slew of problems has been plaguing the $82 billion industry all year. Post pandemic demands, bottlenecks at ports and loading docks, a dire need for truck drivers and a continuing shortage of microchips has delayed vehicle shipments, forced plants to shut down, and caused new car prices to skyrocket.
Microchips are an essential part of every vehicle today and the #1 culprit for the shortage is COVID-19. As lockdowns were put in place in the U.S. and overseas, microchip production slowed, and factories – many in Asia – shut down.
As soon as supply chains return to normal – many experts say it will be early 2023– new vehicles will be abundant again and trade-ins will return to pre-pandemic values. A smart shopper will put up with a little delay getting the new car they want if they buy it now – because the reward of getting substantially more for your trade-in will make it worthwhile.