Soaring US demand for used cars sends prices soaring

Soaring US demand for used cars sends prices soaring

WASHINGTON: The used car market in the United States is seeing an unprecedented phenomenon: Owners selling vehicles for as much or more than they paid for them.

The strange twist comes as a global shortage of computer chips amid the COVID-19 pandemic has stalled auto manufacturing, fueling a price increase for used vehicles, which in turn helped drive record US inflation last year. It “100 percent is a new trend,” which is unlikely to end soon, said Aurelien Guillaud, owner of Arlington Auto Group (AAG), a car dealership based in Arlington, Virginia, just outside the nation’s capital.

Due to the shortage of new vehicles, there has been an influx of demand for used cars, he said. New government data Wednesday showed US consumer prices surged seven percent last year, the biggest increase in nearly four decades, fueled in large part by the dizzying 37.3 percent jump in prices of used cars and trucks.

Given the struggles to get semiconductors from factories in Asia amid the pandemic that has limited new car inventories, rental companies have been hanging on to their fleets, cutting off the usual steady supply of vehicles for the used car market and pushing up prices. And the strict lockdowns in