Prices for used cars rose nearly 41 percent over the past year and those higher prices are, in turn, further driving inflation that is already taking the country by storm, having recently hit a 40-year high. File photo: LMPark Photos, Shutter Stock, licensed.
NEW YORK, NY – Used car prices are surging, thanks to a combination of factors related to COVID-19 generating intensely strong demand. Among those factors are desires to avoid mass transportation due to the pandemic, an overall shortage of new cars due to chip shortages, and a general tightening of belts as the current recession drives people to try and save every penny that they can.
Of course, the reliance on used cars is naturally driving up their prices – prices for used cars rose nearly 41 percent over the past year – and those higher prices are, in turn, further driving inflation that is already taking the country by storm, having recently hit a 40-year high.
Still, at this point, a quality used car can be more cost-efficient than a new one – even with prices continually going up and up – and recently the Wall Street Journal released a list of the top used vehicle models that Americans are snapping up that are leading that wave of price increases.
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Used car and truck prices still unfortunately increasing at fast pace over past year … adding lots of pressure to CPI #inflation but upside is that base effects are kicking in relatively soon and it’s quite difficult to sustain ~40% y/y rates in perpetuity pic.twitter.com/nif3pzUpwh
— Liz Ann Sonders (@LizAnnSonders) February 14, 2022
What’s interesting about many of the cars on this list is that they show the average consumer currently is more concerned with function over form; that is, they are seeking out the models in this list not because they’re flashy, but simply because they address everyday practicality.
The top three models are especially telling in this regard. Taking the top spot, the Dodge Caravan offers impressive interior space for passengers and cargo; number two, the Nissan Versa, has a spacious trunk; and number three, the hybrid Toyota Prius, gets significant gas mileage in a time where prices are continuously going up at the pump.
The price increases for these three models on the used market clearly illustrate their popularity, with year-over-year jumps of 69, 66, and 61 percent, respectively. Other cars on the list include the fourth place Kia Forte, the fifth place Volvo S60, the sixth place Chevy Sonic, whose year-over-year price increases were 58, 56, and 55 percent, respectively.