2021 Cars – A Look Back at the Used Car Sales of 2021

Used car sales have been going crazy during this past year, making it one of the most interesting times in the market. Not long ago, an auction for used cars wouldn’t be much of anything to talk about, but many of these events have been much different from before. Recent auction results show used 2021 cars being auctioned off for more than they cost when they were new, which is insane, but it’s simply an issue of supply and demand. There is a huge demand for used vehicles because new ones haven’t been as available as they were in the past.

2021 Cars – The Numbers Don’t Lie

During the 2021 calendar year, sales of used cars have grown dramatically. This growth took place mostly in the first three quarters of the year, with sales leveling off during this past quarter. When you look at year-to-date numbers, we see that 7,371,298 used vehicles were sold through the end of November compared to 6,688,848 during 2020 for the same timeframe. That is a massive amount of growth in sales. These increased numbers were a direct result of one event that took place during the pandemic.

Sales Were Up, But So Were Prices

Not only did we see a year with massive increases in used car sales for the year, but the average price of used cars was much higher than ever before. Typically, you would look to buy a used vehicle because it is cheaper than the new model. That wasn’t the case this year. In fact, during the second quarter of the year, when we saw the highest average prices, used car prices were on average $25,410 compared to $20,942 for the same quarter of 2020. Between the price increases and the sales numbers, you can see how many vehicles were in demand during this past year.

What Caused Used 2021 Cars Prices and Figures to Soar?

One singular event in the world began the challenges that have faced the automotive market during the past two years. That singular event is the COVID-19 pandemic. While this pandemic cannot be blamed for some of the troubles, the fact that the entire globe was shut down, everyone had to stay home, and people were looking for stuff to do at home created a proverbial “snowball effect” in the automotive industry.

Let’s build our snowball to the increased used car sales.

Electronic Sales Went Through the Roof

Once the pandemic struck, automakers shut down most of their plants or converted some plants to support the medical community that was on the front lines of fighting the pandemic. This led to canceling orders for semiconductor chips that are used to run the computers included in many of the vehicles we drive. Those same semiconductors are now used in gaming consoles, which were flying out of shipping facilities around the world as homebound people were stuck with nothing to do and a desire to be entertained in some fashion.

Car Dealers Bounced Back Faster than Expected
Many car dealers, once the shutdown was over, turned to online car sales, social distancing, and delivery services to bring new cars to customers. This is the second part of our snowball. With vehicles leaving the dealership lots, automakers needed to begin producing cars again, but they now had a limited supply of the necessary semiconductor chips that were needed to run the computer systems of vehicles. Now that gaming companies had the orders that automakers had canceled, there weren’t any chips to be found, and the plants that make these chips went into overdrive to try and fulfill all orders.

Three Major Semiconductor Plants Faced Troubles

With automakers ramping back up to production capacity, in the midst of a shortage of the necessary chips to make the vehicles operate properly, three factories that make semiconductor chips faced problems. One caught on fire, another dealt with a natural disaster, and a third had a walkout of employees. These events are the third part of or snowball that led to a massive increase in used car sales and higher used car prices during 2021. The plants that needed to be running 24-hours per day were unable to do so because of these events.

New Car Dealers Stopped Allowing Lease-End Programs for 2021 Cars

One way that new car dealers began to ensure their used car inventory was being replenished was to halt the traditional lease end programs for customers. In the past, a leased vehicle that had a greater value than the reaming lease could be sold to a third-party used car dealer for a profit that the customer could put in their pocket. The need for more used cars caused dealers to stop this practice and only allow leased vehicles to be brought back to the dealership. This was a big hit for customers that saw used car prices soaring.

Sales and Prices are Beginning to Level Off

Thankfully, nearly everything that happens to slow progress and cause delays can be overcome. Although the semiconductor chip shortage isn’t over, and we’re going to feel the impact of the COVID-19 pandemic for many years, most automakers are getting back on track. The prices and sales numbers of used cars are starting to come back down to the level that we are used to. That might not be good news for used car dealers, but for you as a customer, it’s great news.

We’re Almost There, But…

The prices of used cars may be coming back to reality, and new vehicle inventory is being replenished as quickly as the vehicles can be made, but we’re not quite back to normal yet. If you’re not interested in buying a used car for a high price, it’s a good idea to continue driving the vehicle you currently own as long as you can. Wait a bit and then participate in the used car sales prices that are in line with what you expect when you buy a vehicle that is not new. Make sure you keep your older car maintained to ensure you can wait out this high-priced insanity.