If you’re in the market for a new car, you may have realized that it’s gotten very expensive. In fact, the price of new cars has increased by more than 6%. There are also stories of dealerships adding markups after the fact, especially if the vehicle is highly sought after or if it is difficult to find.
You may then decide that you will buy a used car instead. But the used car market has also dramatically increased. When you compare the prices for 2020 with 2022, used cars are worth more than 40% above prior levels. This means it can even be cost prohibitive to get into a used vehicle, and it may give dealers incentive to increase their prices.
But why are these prices going up? Let’s take a look at some of the reasons.
Supply chain issues
One potential reason is that there was a chip shortage and other supply chain issues. This meant that cars could not be built on schedule, so the supply was simply lower than expected. As a result, the demand for these vehicles went up, and the prices went up with them. When enough people were priced out of the new car market, the value of used cars went up, as well.
The role of inflation
Another thing to consider is simply that most items have gotten more expensive over the last few years. Inflation and price increases have not avoided the car market. As corporations have decided to raise their prices, car companies have gone along with the trend. This is why you will often see that prices are rising for consumers and that companies have been making record profits.
Are dealers charging fair prices?
What all of this means is that you need to be very careful that you’re not buying a car that is a lemon, and that the dealer is charging a fair price. They may charge you far more than the car is worth or they might try to sell you a vehicle that has inherent problems simply because you’re having trouble finding one. But this can be more expensive in the long run when you have to have repairs made and the car doesn’t meet your expectations. And, dealerships are not permitted to charge you more than the price at which they advertised a vehicle.
If you feel that you have been intentionally defrauded in this volatile auto market, make sure you know exactly what legal options you have.