Finding a used car or truck at a bargain price is almost impossible these days. The cost of used vehicles has skyrocketed since the end of last year and prices are likely to remain high for a while. In the past 12 months, used vehicle prices have risen nearly 10% to mark the biggest increase in more than a decade, according to the US Consumer Price Index released Tuesday.
Read: US Consumer Prices Rise in March, Pushing Inflation to a 2-1 / 2-Year High How is that possible? It is a classic case of low supply and high demand. For starters, there aren’t that many used vehicles for sale. The pandemic forced rental agencies to cut back on new car purchases after a sharp drop in the number of people renting cars at the airport and elsewhere. These vehicles are typically sold to used car lots after a year or less. At the same time, the demand for used vehicles increased as more people avoided public transportation or moved from cities to suburbs to escape the coronavirus. Cox Automotive estimated that the demand for used vehicles has doubled since last March. Many Americans preferred used vehicles to save money at a time of great economic uncertainty, especially with the cost of new cars and trucks at a historic time. Earlier this year, the average cost of a new vehicle topped $ 40,000 for the first time, automotive research firm Edmunds found. The imbalance is unlikely to end anytime soon. Big automakers can’t find enough computer chips for new cars, for example, and General Motors GM, -2.15% and others have had to slow down or suspend some of the production. That will limit the number of vintage vehicles that make it to the used car market. The shortage couldn’t come at a worse time. As the American economy accelerates and fully reopens, Americans drive and fly in greater numbers and are more willing to buy or rent a vehicle. Recent federal fiscal stimulus, highlighted by checks of $ 1,400 for most Americans, has also given customers more money to spend. However, they must be prepared for the impact of used vehicle stickers. Edmunds estimated that the average cost of a used car or truck now exceeds $ 20,000.