The Car You Bought During the Pandemic Could Be Worth Reselling
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There are a lot of different reasons why many people wanted to buy a new car. Wealthier Americans might have turned to luxury vehicles since other premium goods and services weren’t available.
According to the Chicago Tribune, the pandemic caused many Americans to relocate for work or a lower cost of living. For states that have limited public transportation options, like Texas, residents need cars to get around.
If you’re not satisfied with the vehicle you purchased during the pandemic, or are looking to switch cars, there’s good news for you. Because of car shortages, used cars might have a higher resale value than usual. New and used car prices have seen massive hikes
What types of cars were purchased during the pandemic?
During the height of the pandemic, many essential workers who relied on carpooling or public transportation found themselves needing a car to ensure their safety.
Others started to spend more time outdoors since it was one of the few things you could do. The increased interest in things like camping, kayaking, biking, and hiking meant people needed a different type of vehicle that was better suited for the outdoors.
The Chicago Tribune reported that the average value of a used vehicle increased by more than 16% in July 2020. According to Cars.com searches for vehicles with tow hitches increased by 55.4% in March 2020 compared to the same period in 2019.
Dealers can sell used cars for close to the original price
The skyrocketing price of vehicles prompted some people to skip the used car option since new cars from the dealership have similar costs. This isn’t generally considered a good financial decision, especially if you only plan to own the vehicle for a short period. The depreciation rate of new vehicles is usually incredibly high, but that’s something the pandemic has changed.
CNN Business reported that vehicle prices are upside-down right now. Typically, a dealer selling a year-old vehicle would receive a trade-in offer of 80% to 85% of its original price. According to recent data, car dealers can now sell vehicles for 95% of the original price.
The microchip shortage is caused by factors like the surge in demand for personal electronic devices during the pandemic. It’s been difficult for automakers to meet consumer demand because they don’t have the chips needed to produce vehicles.
Due to the lack of supply, if you sell back a car that’s close to new, you can potentially make a profit or get back nearly what you paid. The Jeep Wrangler, Chevy Corvette, Subaru Ascent, and Honda Civic might be worth more than the price paid for them.
You probably won’t make as much profit as dealers
It’s important to note that these kinds of markups on car resales might not reflect how much you’ll get if you sell the car yourself. You’ll probably get less than a dealer will for selling a car.
If you trade in your car, you’ll probably get 5% to 15% less than its retail value, as reported by CNN Business. However, if you received a letter from your car dealer asking if you want to sell back your car, you’re in a good bargaining position.
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