red and white car parked diagonally next to eachother

Have car prices gone up?

You’re not imagining things, both new and used vehicle prices have indeed spiked over the past two years.

And there’s no one particular reason for the increase. In fact, there are several, and they’re all pandemic-related.

Reasons for car price hikes include:

Supply issues stemming from a semiconductor shortage
Increases in cost for raw materials
Complications around shipping and parts procurement
Factory shutdowns

The price of new cars has gone up as much as 25% since before the pandemic, according to an ABC article.

A detailed analysis of 1100 models by meanwhile calculates that as of March 2022, the average price of a new car is up 7.6% since pre-pandemic times.

It appears, because of the wait times for new cars (due to supply constraints), used car prices have gone up even more.

According to Datium Insight’s price index in this ABC article, used cars have risen by 50%!

So, how are people purchasing cars at this rate?

Well, there’s a high chance they took out finance to purchase it, with Mozo research showing 52% of car buyers took out a loan to buy a vehicle in the past decade.⁣⁣⁣

If you’d like to find out more about financing your next vehicle purchase, get in touch with us today.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.