When Will Used Car Prices Drop?

If you’ve looked for a pre-owned vehicle recently for your Phoenix commute, you may have noticed that prices are a bit higher than expected. There was an inventory deficiency in 2021 for new vehicles because of the car chip shortage, and as a result, demand for pre-owned vehicles has increased. As pre-owned vehicle demand goes up, the number of vehicles available for shoppers like you to choose from goes down, also resulting in used car prices going up.

But, when will used car prices drop? There are many factors at play that can affect the prices of pre-owned vehicles, but several experts expect used car prices to drop back to more normal levels by late 2022 through 2023. Learn more about why used car prices are going up and how the car chip shortage is affecting pre-owned vehicle prices today with Rocky's Auto Credit! We’ll even help you answer the following questions:

• When will the chip shortage end?
• Will used car prices drop in 2022?
• How do I buy a pre-owned vehicle during the car chip shortage?

What You Should Know About Used Car Prices Going Up

When we’re helping you answer, “When will used car prices drop?” or “When will the chip shortage end?”, it’s important to understand that no one knows exactly when these things will happen.

However, with some research and insights on the vehicle market, you can get a better understanding of the market and prepare yourself to find the perfect pre-owned vehicle for your Glendale adventures. Here’s some information you should know about the increasing prices of pre-owned vehicles:

Pre-Owned Vehicle Prices Are Increasing

If you’re wondering, “Will used car prices drop in 2022?”, we don’t blame you. Pre-owned vehicle prices have been increasing since the car chip shortage. Previously, opting for a pre-owned vehicle meant that you were bypassing depreciation, but that’s simply not the case anymore.

With that being said, no one could really anticipate the large increases in prices on pre-owned vehicles, but it’s possible that prices will drop in late 2022 when production for new vehicles begins to go back to normal.

Used Car Prices vs. Used Truck & SUV Prices

While prices of pre-owned vehicles increased across the board, you’ll find that used car prices are actually going up more as compared to used truck or used SUV prices. There are many reasons why this is the case, but general demand for cars tends to be a bit higher on the pre-owned market because of their smaller footprint and general affordability compared to pre-owned trucks or SUVs.

Pre-Owned Vehicle Prices Will Drop Eventually

So, when will the chip shortage end? Vehicle chip productions are expected to resume back to normal sometime in late 2022. When chip production becomes widely available again, new vehicle production will also be expected to return back to normal. As new vehicles begin to go back to regular production, it’s anticipated that pre-owned vehicle prices will begin to get closer to normal levels.

With that being said, pre-owned vehicle prices will likely remain higher than they were before the shortage. Additionally, the estimated time for used vehicle prices to drop can vary, so be sure to keep this in mind when you’re looking for a pre-owned vehicle to tackle your Tempe travels.

Tips About Purchasing a Pre-Owned Vehicle During the Car Chip Shortage

Now that we’ve answered, “Will used car prices drop in 2022?”, there are some important tips you should consider if you decide to purchase a pre-owned vehicle during the chip shortage:

• Research: If you must purchase a pre-owned vehicle, do your research and shop around. Look for the right dealership that offers fair prices for the market. At Rocky's Auto Credit, we promise to help you get a fantastic pre-owned vehicle at a smart price.
• Understand Long-Term Loans: When you apply for financing, it’s a good idea to understand long-term loans. Longer loans can decrease your monthly car payment but can increase your chances of being upside-down. If you purchase a vehicle and have a high loan balance when pre-owned vehicle prices drop, you could end up having negative equity.
• Trade-Ins: Naturally, the demand for pre-owned vehicles is up, so if you’ve got a vehicle you need to trade in, you could get a good value for that trade-in.

We Can Help You Find a Pre-Owned Vehicle at Rocky's Auto Credit

If you’re in need of a pre-owned vehicle in this market, be sure to work with Rocky's Auto Credit for assistance. We’ve got a wide range of vehicles for you to choose from, making it easy for you to find the right one for your Mesa lifestyle. Reach out to us today to get started!