How Does the Pandemic Affect Used Car Price

You would expect COVID-19 to negatively affect every aspect of the economy — and you’d be mostly right. One surprising area that hasn’t been as hard hit is the sales of used cars.

New Car Trouble

In April 2020, used vehicle sales plunged by 38 percent as the coronavirus shut down states, closed down stores and people were unable to work. By June, though, sales of used vehicles increased significantly at 17 percent higher than the predictions from before the pandemic hit, according to J.D. Power, a research firm.

Part of this could be because new vehicles were more difficult for dealers to get on their lot after many automakers had to close their factories or sharply reduce production for almost two months in the spring. As a result, sales personnel at the dealerships have been encouraging customers to consider a vehicle from their used car inventory instead.

Online Shopping Helps

During the pandemic, social distancing is required by many jurisdictions as they struggle to contain the virus. As a result, many people who were in the market for a car turned to online shopping instead.

In this case, shoppers tend to search for a specific make and model when they look online. The demand for a particular vehicle could mean that its price increases as well.

Interest Rates Dip

While Edmunds, a site that researches vehicles, noted that the average listing price of a used car was $708 higher in July 2020 compared to June, consumers are still often opting to go that route instead of purchasing new. The closure of the new-car factories, coupled with sparse inventory, has made used vehicles more attractive. Fortunately, interest rates for a 36-month used car loan have averaged about 4.73 percent compared to 5 percent in March.

The experience in Charlotte, NC has mirrored that of the nation as a whole. Dealerships have found it challenging to stock their showrooms with new inventory. As a result, many shoppers in the area have turned to high-quality used cars in Charlotte NC instead. Sell A Car Online offers a digital sales experience for those who want to sell their car or learn more about its trade value.

Source: During COVID-19 Pandemic, the Used-Car Lot is Hot