What’s the current situation? 

There’s no question about it: used car prices have surged recently. That’s in large part because of the pandemic. When COVID struck, car manufacturers scaled back production fast as people stopped moving in lockdowns across the world and cases surged in manufacturing plants. And at the same time as demand for cars dropped, home office needs rose. That meant that companies producing the chips used in car computers scaled up production for home computing systems. Now, COVID-19 outbreaks in Asia continue to disrupt factory operations, and shortages of components needed for the chips mean production can’t pick up to meet demand. 

Fewer people trading in cars during the pandemic, along with rental companies hanging onto older inventory because they can’t get new cars, all has led to a shortage of used cars. A convergence of factors has spurred record high used car prices. 

Assess the deals

Only you can know what the right auto-purchasing decision is for you and your family. But when you’re looking at high-mileage, older vehicles for several thousand more than you would have been paying even a few years ago, it just doesn’t seem worth it. So is buying new the way to go instead? 

If you have a car you want to trade in, now is the time to do it. You can get way more value out of it than ever before with prices so high. And as you test drive around to choose your new vehicle, you might find that the features and value you get from a new vehicle, along with more inventory, could be worth the higher price tag. Plus, experts predict that while prices may remain high for a bit while inventory is tight, we’re likely past the record high prices we saw in December. 

Keep in mind, as gas prices rise, a newer, more fuel efficient or electric vehicle might be a smart move. More and more high-tech models are hitting the markets, making a new vehicle even more appealing. 

Getting the most from your financing 

When it comes time to finance your purchase, going local can give you peace of mind in turbulent times. Reach out to your local lending specialist at RCMU to find out how you can get out on the road faster with financing. 

Maybe you’re not feeling like it’s the right time for you to buy a new car. But even if you decide to wait for new wheels, you can still make the most of your current loan. RMCU refinancing options let you lower your interest rates by at least 1%, if your current rates are 5% or more. That means you can pay a lot less and get more mileage out of your current ride. It’s easy—apply online, and see what your refinancing options are. 

If you enjoyed this blog, take a look at some of our other related articles:

• Buying vs. Renting: The Financial Showdown
• Buying New Furniture on a Budget
• Easy Ways to Ease Your Financial Stress