Car Sales in Iowa Higher Than Pre-Pandemic Levels
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There is no dispute that the pandemic has impacted the economy, including car sales.
While the news has focused on the increase of online shopping and sporadic supply shortages, one surprising statistic has seemed to fall through the cracks—there has been a surge in new car sales, particularly in Iowa.
Most people in the Hawkeye State tightened their budgets at the start of the pandemic, which included finding the cheapest car insurance in Iowa. With pandemic restrictions easing, Iowans are looking to upgrade their ride. Some are even looking into purchasing a luxury car for the first time.
Here is what you need to know about the current state of car economics.
Recently, there has been a surge in new car sales, particularly in Iowa. | Twenty20
Nearly every car has increased in value
There’s good news for everyone who owns a car: your car is more valuable than it was before the pandemic. Of course, this isn’t an absolute, but you get the idea.
During the pandemic, car production slowed down. Now, demand for vehicles has returned. However, car manufacturers have had a difficult time getting production levels back to normal. This imbalance has created a car shortage that may last for a significant amount of time.
Increase in used car sales
The shortage of new cars has created a trickle effect on the used car market. Those who wanted to buy a new car but couldn’t find one in stock have entered the used car market. This has increased the demand for used cars on a normally static supply. Increased demand increases the value.
Rental car companies have also played a role in used car inventory. After a rental car gets a certain amount of mileage, the company tends to sell them off to used car dealers.
However, there were fewer car rentals during the pandemic. This created a situation where rental companies have fewer used cars to sell to dealerships. Decreased supply increases the value.
Iowa car sales have surged
One would assume that with the increased cost of cars, purchases would be decreasing. In reality, car sales in Iowa are soaring.
Radio Iowa has reported that new vehicle registrations are up 28% compared to this time last year. This shouldn’t come as a surprise as car sales slumped in the pandemic. However, car sales are quite higher than they were at this point in 2019. Up by 17% to be exact.
One factor is the appreciation of trade-in vehicles. Everyone expects their vehicle to depreciate over time, but one of the pandemics’ side effects is an increased value in used cars. The value of used cars is probably near its peak, and many owners want to cash in before depreciation returns.
Iowans are in a unique position. Most car dealerships in the Hawkeye State can arrange pre-sold new vehicles. Their lots may be empty, but they can still sell you a new car that is in transit to Iowa.
Online car dealerships have also played a role. While many car shoppers were suspicious about making such a large purchase online, the pandemic forced buyers to look into these online-only dealers.
In turn, some online dealers have earned the reputation of being reliable, and now people are more comfortable buying their next set of wheels online.
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