New and used car prices aren't going down anytime soon
Get ready to shell out more money, experts say prices aren't going to fall until the end of the year.
If you're getting ready to buy a new or used car, be prepared to pay more. That's if you're even able to find what you're looking for.
Used car prices are up almost 40%, and new car prices are up about 12% compared to last year.
The full-year average price increase was $6,220, up from $3,301 in 2020 and $1,799 in 2019.
"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 said.
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Those prices aren't expected to go down anytime soon, Schrimer said. It could be the end of the year before prices start to fall.
"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.
So what's causing those higher prices? Experts say it's because of a national computer chip shortage, increased labor and production costs, and shipping delays. Used car dealership owners say they're dealing with a small inventory which is leading them to have to raise prices.
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"I compare it to real estate now," Shawn Shakour, with S&R Auto Sales in Sacramento, California, said.
Shakour said the demand is higher than it's ever been before for used cars. It's causing him to have to pay more for them at auctions.
"A customer comes in thinking we’re making these huge profits on the cars, and we’re not. Auction prices are going up, it’s like a domino effect," Shakour said.
Just a few miles away at TRD Auto Sales in Sacramento, Wael Ibrahim said he's been hit hard as well by the higher prices.
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"Every time I look at a used car I try to buy, I feel my heart pumping so hard," Wael said.
Normally, Wael would have a full lot of used cars, but it's only about half full at the moment. He said he's been having trouble buying cars to sell.
"They’re paying more for labor, and they’re paying more for material. It’s hard all the way around, it’s tough for used car dealers to survive right now," Wael said.