Why is the Used-Vehicle Market in its Current State?
Covid-19, Drastic Production Dips & the Stubbornness of both Buyers and Sellers
One of the latest Cox Automotive Inc. articles offers a detailed but simple explanation for why the used-vehicle market is in its current state. Referencing the extended factory shutdown in 2020, coupled with 8 million fewer new vehicles produced (and 8 million less future used cars), it’s been tough for the market to rebound. Fewer lease turn-ins and rental units has led to scarce availability. Car owners are choosing to repair and extend the life of their purchased vehicles rather than upgrade, causing another barrier to improve the secondary market. It seems the only way to fix this issue is to incentivize automakers to once again switch up their inventory focus and boost production in the most affordable segments (compact sedan, midsize sedan and compact SUV), which will hopefully spike trade-ins and first-time auto purchases.
1. Cox Automotive Inc. Why are Prices so High? The Used-Car Factory was Shut Down; coxautoinc.com/market-insights/why-are-prices-so-high-the-used-car-factory-was-shut-down/