Are you considering selling your new car? If so, you need to know what you can expect currently. In fact, When buying or selling any product, it is important to understand market trends. According to 2021 data, the used car market has been steadily increasing in popularity since the COVID-19 pandemic began. However, that trend is not necessarily permanent. That is why now is potentially the best time to act, if you want to sell your used vehicle.
It is easy to find buyers for used cars these days. More people are looking for used vehicles than ever before. However, that is not the only advantage to selling now. According to Consumer Reports data from 2021, the average sale price of a used car increased by 32 percent from 2020 to 2021. Understanding the reasons for those trends can help you anticipate the perfect time to sell your used vehicle. You also need to understand the true value of your vehicle before you can effectively sell it.
Commuters Want Their Own Cars More Than Ever, But Often Temporarily
Safety during the COVID-19 pandemic has become a top priority across the country and around the world. One of the biggest challenges for commuters who have taken public transportation in the past is balancing the need to get from point A to point B quickly with the need to stay safe. There have been major reductions in the numbers of:
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Carpooling Coworkers
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Bus Riders
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Train Riders
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Subway Riders
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Commuter Airline Flight Passengers
As such methods of transportation have become less popular, commuters have sought to purchase their own vehicles. However, many of them are doing so with the intention of driving as a temporary solution until COVID-19 is more controlled. That is one reason used cars are experiencing a surge in popularity.
Commuters Can Afford Their Own Used Cars
Commuters wanting their own used cars ordinarily is not enough to increase used car sales because those commuters cannot necessarily afford to purchase used cars. However, the COVID-19 pandemic caused unprecedented decisions by federal, state, and local lawmakers that led to more used car affordability for employers. For example, several stimulus checks have been issued to Americans since 2020. Also, many bank officials have more lenient borrowing policies than they did prior to the COVID-19 outbreak.
COVID-19 New Vehicle Supply Shortages
The current strength of the used vehicle market is also partially due to new vehicle supply shortages created by the COVID-19 pandemic. Temporary shutdowns, parts shortages, and pandemic-related goods transportation delays have led to a lack of new car availability. Consumers cannot always find the make, model, or features they desire when looking for new vehicles. As a result, many are turning to the used vehicle market to find what they want.
Higher New and Used Vehicle Prices
The new vehicles that are available today have higher price tags than they did before the onset of COVID-19 for several reasons. One is most newer vehicles feature new technology, which carries a high cost with it. Another is manufacturers and dealership staff know new cars are hard to come by in recent years. Yet, many consumers are looking for new cars. As a result, they feel comfortable charging higher prices. However, those high prices make used cars more appealing to consumers who want to save money. That is why many used car dealerships and private sellers are also charging more for used cars.
Used Cars Are Also in Shorter Supply During COVID-19
Despite the popularity of used cars currently for consumers, many used car dealerships are struggling to supply customers with a good selection of used vehicles during COVID-19. The shortages in used car lots stem from the lack of new vehicles available. Consumers cannot find new vehicles. Therefore, they are not trading in their old vehicles.
Used car dealerships also often form relationships with car rental companies. When those companies are ready for newer vehicles, they trade in the older models. However, since the onset of the COVID-19 pandemic, those ordinarily predictable trades are far less predictable. In fact, the rental car business almost completely collapsed in 2020. As a result, rental car trade ins were greatly reduced in 2021.
The Importance of Determining the Current Market Value of Your Used Car
Many of the used cars that are available currently in the United States are sold privately by their owners. If you want to join the ranks of successful used car sellers taking advantage of market conditions during the pandemic, it is vital to understand the current market value of your used car. Its value in today's market is definitely not the same as its pre-COVID value. To look up current used car values, use online tools like Kelley Blue Book.
The most important reason to know what your car is worth today is to get top dollar when you sell it. You may also want to sell it quickly. Potential buyers may not look twice at your vehicle if you want too much for it. However, an asking price slightly lower than the current market value can help you make that quick sale. Yet, a price that is much too low may make potential buyers think something is wrong with the car. It is up to you to use knowledge of the vehicle's true value to capture the interest of buyers without sacrificing too much.
Combine a Favorable Sellers Market with a Powerful Selling Position
Selling a vehicle is not always about making a quick sale. You may prefer to take your time and get as much money as possible. Knowing the current value of your car is the best way to start off from a powerful position when negotiating its sale. A potential buyer cannot force you into a bad deal when you know what your vehicle is worth.
Knowing the current value of your vehicle allows you to take advantage of the current favorable conditions for sellers while still appearing to give the buyer an advantage. You can do so through negotiation. Most used vehicle buyers and sellers expect some negotiation to take place during the sale process. Experts recommend starting by setting a price that is up to $2,000 above the desired sale price. That way you can negotiate with the buyer while still getting the amount you want in the end.
