Rising prices in the automotive market have not only wiped out the availability of new cars, but have increasingly puts consumers who decide to buy a used car out of the budget.
The crisis affecting the used car market is clearly reflected in the bad news reported by used car sales giant CarMax, which reported a 54% drop in sales this week.
This accident, he described in detail, was associated with a 6.4% drop in the number of used cars sold in August.compared to August 2021.
According to CarMax, the drop in sales was due to “vehicle accessibility issuesthat stem from general inflationary pressures.”
Adding to the high-price scenario are the effects of higher interest rates that the Federal Reserve has implemented in recent months, the company added. last mid-September 0.75%.
Consumers’ ability to shop is declining as rising interest rates make loans more expensive and therefore limit the ability to pay with cash in the face of rising prices.
According to the CarMax report, the average selling price of a car is $28,657. between June and August, up 9.6% from 2021.
Falling sales cause alarm in the sector
Rising prices for used cars in the United States have had mixed results for businesses, on the one hand boosting overall business revenue but also alienating consumers.
In the case of CarMax, its shares fell more than 24% on Thursday this week, having learned the results of sales and revenues, which turned out to be significantly lower than forecasts of specialists.
For its part, CarMax competitor Carvana’s shares fell 23%, while AutoNation reported a 10% decline in its shares. New car manufacturers were not far behind with declines recorded for General Motors, Ford, Stellantis and Tesla..
Until recently, high demand for new cars put automakers in a crisis, they could not meet it and replenished their waiting lists due to a lack of components, mainly chips for car computers.
This caused car prices to skyrocket, given the demand, which was about 40% of US households buy a car every year..
For its part, used car prices have been erratic, falling 2% in August last year, according to the latest report from the Bureau of Labor Statistics.
Despite the fallUsed car prices are still 48% higher compared to August 2019.according to the Consumer Price Index (CIP), while new car prices have risen another 30% over the past three years.
Source: La Opinion
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