What Can DC Do About Used Car Prices?

Thanks to the ongoing global pandemic, the auto industry feels like a bizarro world. It used to be that visiting a used car dealership meant that you’d save a significant amount of money compared to shopping for a brand new car. That’s not the case anymore.

The pandemic brought about a global supply chain delay that put the auto industry on hold for a while. Auto manufacturers are still trying to catch up. With fewer new cars available for purchase and a rise in demand for automobiles, shoppers are turning to used cars. Since there are only so many used cars available at any given time, prices have rocketed to new highs. In some cases, buyers see “new car” pricing for pre-owned vehicles at their favorite used car dealership.

Is this just the new normal, or is there something the government can/should do about it?

Get The Pandemic Under Control

Regardless of your personal feeling or political beliefs, the COVID-19 pandemic is causing some major problems around the world. Whether it’s a worker shortage, supply chain delay, or lack of shoppers, all industries are feeling the effects of this virus.

There are endless viewpoints on exactly what it will take to help American’s move past the pandemic. Some argue for stimulus checks that give people money to spend. Others push for mask, vaccine, or social distancing mandates, while others believe building herd immunity is key.

While it’s possible that the pandemic will eventually disappear on its own, the folks in D.C. should be exploring every option to help protect people, businesses, and jobs until things go back to normal.

Beef Up The Supply Chain

One of the most significant elements impacting the auto industry is a computer chip shortage. These semiconductors are used to make a host of technologies function properly, from heated seats to onboard Wi-Fi to in-dash gauge clusters and more.

The problem with these semiconductors is that everyone wants them, and only a few factories produce them. These computer chips are also used in consumer electronics like cell phones, computers, and video game systems, items that are in high demand.

Some manufacturers have decided to forego adding new tech to their vehicles or have even put a pause on producing less popular models until the chip shortage is resolved. That not only means fewer vehicles overall are being produced, but a smaller variety of models is hitting showrooms.

This situation creates an opportunity for the government to step in and take action. This could mean helping get new factories set up and workers trained to produce these missing computer chips. It might also mean reducing tariffs or other blockages that keep overseas goods from getting into American ports.

The government doesn’t necessarily need to take over production and supply lines, but it should find ways to ease the burden of those in the business.

Incentivize New Technologies

Now that drivers know they can pick up amazing vehicles from a local used car dealership, an abundance of new cars may not tip the scales back into balance. The high demand and competitive pricing of used cars might become the new normal.

To help get things back to where they should be (used cars costing less than new cars), the government can incentive updated tech that can only appear In new models. Electric vehicles are a great example. Sure, there have been hybrid and EVs available for years, but more manufacturers are jumping into this game with some pretty incredible offerings.

The government can help create or maintain existing tax incentives for owning green vehicles. There may also be room to at least temporarily keep interest rates low so more people can afford new vehicles. We should consider anything that will make brand new vehicles more appealing once they are back into regular circulation.

It’s Not All On The Government

Some people might argue that it’s the government’s job to correct the situation with the used car market. Our representatives should absolutely be exploring every option to help get things back to normal, but it’s not on their shoulders alone.

Shoppers are going to have to accept that used cars cost more now than they did a couple of years ago. There’s a lot of competition for a small inventory of vehicles. Drivers do have the benefit of used car dealerships paying top dollar for trade-ins and used cars as well, so there is an opportunity for an upgrade without a huge financial burden.

Ultimately, it’s up to every individual to see that the world is changing. People have to adapt, or they run the risk of being left behind.