The average transaction price for a used car was $25,410 in the second quarter of 2021, up from $22,977 in the first quarter and 21% year-over-year, according to data from online automotive resource Edmunds. That figure marks the highest average price over a quarter for a used car that Edmunds has ever tracked.
Several automakers, including General Motors and Ford, have cut new vehicle production due to semiconductor chip shortages, putting further constraints on inventory and driving up prices. The boosted value of trade-in opportunities will likely prompt new car buyers to offer their current vehicle up to dealerships and retailers. The average trade-in value of a used vehicle in June was $21,224, up 75.6% year-over-year, according to Edmunds.
While Jeff Dyke, president of Sonic Automotive, said he does expect the chip shortage to “alleviate here in the coming months,” the tight car supply has been beneficial to companies like Sonic Automotive that sell used cars. However, Dyke says there are signs that the market is leveling off, with prices dropping by as much as $2,000 for a used car over the course of July as the supply of new cars is starting to increase.
Read the article at CNBC.