You have made the exhilarating decision to buy a new ride. It is 2021, and the world is emerging from a pandemic. The timing could not be more perfect because logically, prices have to be low, right? After some research, it is clear that prices are ridiculously higher than expected. In dismay, you realize the price tag is only the beginning of the money leaving the bank. Finance questions race through your mind. How much will it cost me to own this car? Suddenly, the car buying experience you imagined goes dark.
No question, we as a nation live in a costly day and age, car buying especially. We are trying to recover from a global pandemic, and that has changed the automobile industry tremendously, making buying a car in 2021 more expensive than any previous year. When the pandemic was at its worst, car dealerships and manufacturers had to close their doors, worrying if customers would need cars like they did in the past. Still today, manufacturers lack parts needed for production and as a result, the prices of vehicles continue to rise drastically. It is crucial to recognize the cost effects for this price surge because there are solutions available to make car ownership less expensive, despite the failings of the automobile industry.
2021 Vehicle Supply Shortage Facts is the Leading Cause For Current High-Prices of New and Used Cars
- Semiconductor chips for consumer electronics became top priority which caused chip shortages for the car industry.
- Automakers canceled orders for new inventory and parts due to their experience with previous economic crises where vehicle purchases went down nationwide.
- Due to the lower inventory, the car dealerships could not keep up with unexpected demand for new and used vehicles.
- Extreme delays at the Long Beach port, preventing tens of thousands of parts from reaching the manufacturers.
Car Buying Trends
According to a recent article in Business Insider: “In June, new-car inventory plunged to just 46% of 2019 levels, according to Cox Automotive. Declining inventories, and a steady demand for new vehicles have pushed prices on dealer lots skyward.” The average price for a new car in February of 2020 was $38,130 thousand and today that number has risen to $42,330.
If you came to the conclusion that a hot, vintage car (or a used minivan) would be the way to ride in style, we caution you before that train of thought leaves the station. Used cars are also a high-priced ticket item today. Most consumers are following this thought process causing huge price increases in the used car market. Older models are now more expensive than ever before with the average price in February 2020 averaging $20,680 and climbing to $24,460 in June 2021. CNN says that: “Used car prices shot up 30% in the 12 months leading up to May, just below the record one-year increase for used car prices reported in 1975.”
The global pandemic’s supply chain shortage affected the automobile industry overall and thus both new and used car sales have reached all-time highs. Just as the price of the actual car increases, so do the costs to care for them, which takes vast amounts of money out of the consumer’s pockets.
Relax And Take Care Of Your Car Stress Free!
If you run into any breakdown or mechanical failures, we will do our best to remove the stress and the high costs by being there for you every step of the way. If you need a new alternator, sensor or even a turbo…we at Breeze Protection, offer total coverage for your car. With your choice of repair shop, we communicate with the mechanics for you to make sure they have everything they need for your car’s repairs and servicing. There is finally a way to ease the financial stress when taking care of your car.
Find out about our Total Coverage and how we check all the boxes to care of your vehicle in a less expensive, worry-free way for a RISK FREE $15 a month!