Used Car Prices Skyrocket Despite Lower Inflation

Flinching from Rising 2nd-Hand Car Prices: RAM 1500s Lead the Pack.

Though the level of inflation from last year has since diminished, many customers are still forced to pay excessive fees for pre-owned autos. A report from CBS News featured how various vehicles very much in demand in America have achieved historically high prices when on the secondary market.

The tremendous ascent of second-hand car values is a consequence of the current lack of new automobiles due to COVID-19. iSeeCars.com announces that used car costs have jumped nearly 48% since 2019. When factoring in interest rates having escalated 50% over the past two years, customers when purchasing a pre-owned vehicle are fighting real struggles. Irrespective of preference for a truck or an exotic car, buyers must face these difficulties.

A CBS story highlighted the latest data from iSeeCars.com illustrating the pre-owned vehicles with the biggest price surges. It comes as little surprise that favored new cars regularly become favorites on the used market – the RAM 1500 pickup ending up at the top. In 2019, it was being sold for a mean of $27,324. Fast forward to today and that amount is now an astonishing $42,881, representing an impressive hike of 56.9%. Even customers shopping for more affordable models are feeling the impact; back in 2017, you could be the proud owner of a Toyota Corolla for around $14,220 – four years later, however, and you’ll need to pay almost 50% more, or $21,308.

The cost of procuring a second-hand RAM 1500 has increased significantly, owing not only to heightened automobile charges but also the spiraling interest rates induced by the U.S. Federal Reserve as it aims to suppress rising prices. Used car loans have notably higher interest rates because bankers take them to be more dodgy than fresh vehicles. This is manifesting itself in larger monthly payments. Let’s examine the “before and after” costs of availing a loan to buy this pre-owned RAM 1500.

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Currently, a buyer of a pre-owned RAM 1500 confronts a monthly payment that is almost $850, 72% more than it was four years in the past. Additionally, total borrowing expenses have significantly escalated. In 2023, somebody availing this example hypothetically will have to pay out more than $12,000 towards interest, soaring 247% higher than it did in 2019. Fortunately, with the Federal Reserve leaving the interest rate untouched at its most recent gathering, there is faith that funding charges on second-hand car loans might decrease. Yet, it remains uncertain when that will come to be.

Various resources, including CBS News/WBOC, the U.S. Federal Reserve, iseecars.com and statista.com, have shown that car prices have steadily increased over the years. Calculator.net also corroborates this claim, providing calculations to display these figures in an easily understandable manner. Since the auto market is subject to changes depending on numerous social, financial, and global factors, it is not possible to predict if this trend will continue in future years.