The Gap Closes Between New and Used Cars
Is the Best Time to Trade Now?
by Elizabeth Hensley
The evidence continues to mount that now is the best time in years to trade in your current vehicle. Why is that? There are actually a few notable reasons.
Both new and used car prices are rising. There is a shortage of computer chips needed for new cars to be manufactured causing an all-time low in inventory. This is trickling down to dealerships and supply has hit historically low levels. So, the lack of new stock hitting showroom floors is driving prices up. The cost of used cars is continuing to rise for much of the same reason: supply and demand.
With fewer new cars available, people who are looking for a new car are being forced to look at used car inventory. During 2020, major purchases like automobiles were put on hold due to uncertainty about the economy as well as less time spent on the road. Car rental companies, which usually sell off their older models and replace them with new ones, sold up to 1/3 of their fleet to keep afloat during the height of the pandemic. With many beginning to travel again, there is a shortage of cars available to rent, and they are not selling what they have because they cannot predict when new car levels will be back to normal to replace their older inventory. Another reason for the hike in price is millions of people are returning to work. Demand for a newer vehicle with limited supply in addition to stimulus money has caused a perfect storm that is essentially driving up the demand.
So, what does this mean for you? The value of your current vehicle may actually be worth more today than it was a year ago. If you are in the market for a new or newer car, the limited supply has likely driven up the price of your trade. In turn, this lowers the amount of money you must spend for the vehicle you intend to purchase. With the gap between used and new car prices getting smaller, you may find yourself in a position to upgrade.
Contacting ACU and letting us show you what you are preapproved for can help arm you with important knowledge when you head to the dealer. Member representatives can help you find the value of the car you intend to buy and approximately what you should receive for your car. For a limited time, ACU is also offering up to 90 days deferred payment on auto loans so, there has been no better time to use your trade to your advantage.*
Call a member representative today at 800-245-8112 to get on the road to saving.
*An application is required for all loans. Not all who apply will qualify.
Want to stay informed about changes that may impact our members? Follow us on Facebook!