New vehicles are harder to come by and used vehicles are now more expensive than EVER.
Have you been looking to get a new vehicle lately? If so, you probably ran into extremely limited options and encountered higher than usual prices! Maybe that caused you to look at getting a new-to-you vehicle, which, in turn, made you realize that the prices of a used vehicle have also skyrocketed! With the current state of the automotive sales industry, repairing your current vehicle has become an even more popular and affordable option.
Auto repair shops are busier than ever before due to high demand for their services. At our auto repair shops, we have been seeing a trend of more and more people choosing to put money into larger repairs on their vehicles instead of looking to replace their vehicles. We have 2-3 service advisors at each of our shops that prioritize the importance of creating a good customer experience. A key part of providing a great experience is educating our customers on all the information they need to know about their vehicle, then discussing their options with them about what repairs should be done immediately and which ones can wait. There are times when the cost of the repairs needed for a customer’s vehicle outweighs the value of their vehicle. In those instances, we inform our customers that they may be better off retiring their vehicle and finding something different, instead of putting more money into repairs. We have been finding an increase in the number of people that are wanting to take on the cost of repairs for vehicles that once would have made more sense to get rid of.
What is causing this change to occur?
The costs of purchasing new and used vehicles have become increasingly more expensive. At the end of last year, the average cost of a new vehicle rose to over $47,000 according to Kelly Blue Book. That is more than a 25% increase than the average cost of a new vehicle in 2019. What is even more surprising is the increase in used vehicles, which is up 42% from 2019, with the average cost of a used vehicle being over $28,000.
On top of these significant price increases, the inventory levels for new cars has also become a problem. Due to the worldwide shortage of microchips, manufacturers have been unable to produce as many vehicles as before. The shortage of new vehicles has left consumers to pay a premium while having fewer options to choose from. There is a similar inventory problem in the used car industry. There is simply not a large selection to pick from, and again, coming at a premium cost to consumers.
If you are interested in selling your vehicle, now is the time to do it, as it is truly a seller’s market. Similar to the housing market, the trick with selling your vehicle is making sure you can get into a new one that you actually like.
The downside to selling your vehicle right now is that it’s not a buyer’s market. Buyers are finding themselves between a rock and a hard place. For years, it was common knowledge that purchasing a used vehicle was the smartest financial decision when you were shopping for a different vehicle. With the cost of used vehicles being so incredibly high, getting a used vehicle is not always the best financial option any more. Some used vehicles are being sold for prices within $5,000 of their brand new counterparts. There have even been some instances where lightly used vehicles have even been more expensive than the brand new version.
With such an increase in the number of consumers choosing to stretch out the life of their vehicles, auto repair shops like ours have been left with an increased demand for our time and services. It makes sense why people are wanting to make their vehicles last and we are doing everything we can to help them accomplish their goals.
Our team has been focused on making sure we are well stocked with all the essentials as well as keeping good relationships with our parts suppliers so that we can continue to provide exceptional service to our increasing number of customers.
Buying A Used Vehicle?
In some cases, fixing a vehicle just doesn’t make sense, no matter how crazy the market is. If you find yourself ready to purchase a used vehicle, make sure that you get a Pre-Purchase Inspection BEFORE committing to a vehicle. We have been able to save MANY customers from purchasing vehicles that would have cost them thousands of dollars in repairs that were not immediately obvious to spot. A typical Pre-Purchase inspection takes around an hour and a half. Any trustworthy seller should let you take the vehicle you are looking to purchase to your trusted auto repair shop for an inspection. Knowing what you are getting into is well worth the wait it takes to bring in a potential vehicle for an inspection.
- Julia M.