The price of used cars is revving up even faster than new cars, and experts are sounding the alarm.
“New car prices, used car prices, old used cars, trade-ins, I don’t care what it is. If you’re looking at car anything, it’s getting expensive,” Edmunds.com senior manager of insights Ivan Drury told FOX Business’ Jeff Flock.
The car value expert reacted to the recent US Department of Labor statistics which revealed that used car prices are up nearly 40% from last year. New cars are also up 12%.
“Nothing, absolutely nothing compares to what we’re seeing in today’s market,” Drury said.
NEW AND USED CAR PRICES AREN’T GOING DOWN ANYTIME SOON
According to Edmunds data, a three-year-old Dodge Grand Caravan is worth more than $25,000 today – up 69% from one year ago. A Nissan Versa of the same age cost $9,842 last January, but has since increased 66% to an average of $16,366.
At Barbera Autoland in Philadelphia, a 2019 Chevy Equinox had an MSRP of $26,700 when it first rolled onto the lot. The sticker price today is $29,984.
The higher prices are fueled by a global computer chip shortage, increased labor and production costs, as well as supply chain delays.
“You could really attribute 90 to 95% of this problem with production down to just the chips,” Drury explained.
While some companies like Ford previously stated the chip shortage could alleviate this year, dealers aren’t expecting prices to calm down until 2023.
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“It’s a dealer’s market, it’s a seller’s market, and we’ve seen that consumers are paying big premiums to buy a car,” Mark Schirmer with Cox Automotive told FOX Business.
“New car prices will not be gaining like they have, but we also don’t expect significant drops in new or used car prices in the foreseeable future,” he said.
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FOX Business’ Jiovanni Lieggi contributed to this report.