Workers assemble Ford cars at a factory in Chicago, Illinois, U.S., June 24, 2019.
The average selling price of a used car rose to a record high of $25,463 as the auto industry was hit hard by a global shortage of semiconductor chips and a decline in the supply of new vehicles, with U.S. buyers turning in large numbers to the used car market.
According to data released by U.S. market information company J.D. Power, the average price of a used car in the U.S. broke the $25,000 threshold for the first time in April, reaching $25,463, about $2,800 more than consumers paid in the same month last year.
According to the car sales website “TrueCar,” used car sales reached 3.4 million in April, an increase of 58 percent over the same month last year.
The chip shortage has slowed production at automakers, including General Motors and Ford, which have halted production lines at several plants. The price of new cars has been rising for months, and the continued shortage of chips will continue to push up the price of new and used cars.
“The used car market will continue to be hot, with prices remaining at record levels.” “This will not change in the near future,” said Jonathan Banks, Junti’s vice president for vehicle valuation, in a statement.
The rental car market nearly collapsed last year due to the Communist China virus (COVID-19) pandemic, and production problems in the new car business and the influx of buyers under the stimulus have inverted the used car market, leading to a shortage of inventory. And rental car companies are usually the most consistent source of used car inventory nationwide.
Larry Dixon, a vice president in the used car market, said there is a gradual opening up and a very strong demand to drive outside, which is an unprecedented situation.
Valeri Tompkins, senior vice president of TrueCar, reminded car owners that if they want to sell their used cars, now is a good time.
The shortage of chips has affected the production of most modern electronics and automobiles, and the surge in demand for chips over the past decade, especially during the pandemic, has created an unprecedented global shortage situation.
According to Reuters reports, to address the shortage of semiconductor chips, U.S. Commerce Secretary Raimondo (Gina Raimondo) will meet next week with top leaders of auto industry giants, including General Motors, Ford Motor and Stellantis Group, the world’s fourth-largest automaker.
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