Anyone, who’s checked the used car market recently, has started to wonder why are used cars so expensive right now. There are many reasons for skyrocketing prices, but coronavirus is the main culprit here. Pandemics have affected almost every industry and automotive businesses aren’t exceptions either.

If you’re having a hard time deciding between new and used cars and rising prices are complicating the whole process even more, you’re in the right place. Today we’ll discuss all the reasons why pre-owned vehicles are so expensive right now. Let’s begin!

Why are used cars so expensive right now?

If we’re speaking generally, coronavirus is the main reason why used cars are so expensive. Lockdown meant bankruptcy for many businesses, but the automotive industry, particularly the used car market has been thriving.

According to the Manheim Index, the increase in wholesale used car value amounted to 15.1 percent in January 2020. If we analyze those numbers, we’ll see that it’s an unprecedented upsurge.

You might be thinking that there’s no link between rising prices and pandemics, but trust me, the connection between these two is way more cohesive than you might think.

The answer lies in the basics of economics i.e. the relationship between supply and demand.

Why are used cars so expensive now? – because the manufacturers couldn’t come out with new cars as their plants were closed.

This meant that people who wanted to purchase a private vehicle couldn’t turn to famous companies and get their newest releases, because there weren’t any.

What could they do? – the used car market was the solution. It had more options to provide and people didn’t really have a choice.

In other words, the demand for used cars skyrocketed.

But dealerships need their sources to get their cars, right? Be it manufacturers, themselves, or the auctions, they all experienced shortages.

Dealerships had a hard time filling their inventory, which meant that supply was insufficient for the existing levels of demand.

High demand, combined with insufficient supply equals (you guessed it) the price increase. This process is inevitable because it’s how economics works.

Therefore, coronavirus and the interdependence of supply and demand are the main reasons why used cars are so expensive. Even though the prices stopped rising at a certain point, they remain quite high and don’t seem to follow a plummeting trend.

Why are used cars so expensive now and will the prices remain so high throughout the year?

Even though coronavirus is the main cause of increased prices, there are other reasons as well.

If we take a look at trends for the last three years, we’ll notice that used cars were rising in popularity even without pandemics. Used car purchases amounted to 77% in 2017, 80% in 2018, and 85% in 2019. 2020 exacerbated those numbers even further.

Therefore, as the demand increases continually for the used cars, their value rises as well.

But it’s still impossible to answer why are used cars so expensive without mentioning coronavirus or its attributes.

There were two more reasons for increased demand in 2020 and both were associated with the pandemics.

The first one was the safety measures. The best choice was to stay at home, but people who couldn’t, preferred to drive in a private vehicle than expose themselves to a virus. Carpooling and public transports couldn’t provide the safety we needed.

Therefore, people started investing more money in used vehicles.

Another reason was the stimulus package. As some people ended up with coronavirus relief checks, they decided to invest that money into a used car.

What to expect during the year?

The prices aren’t likely to drop any time soon. They remain quite high right now. If the manufacturers can release newer vehicles the same way they used to, the supply will start to increase. That will essentially cause the prices of used cars to return to their average margin.

Since our lives have become so unexpected, it’s become really hard to tell what will happen in the future. Hopefully, the market of used cars will be able to balance itself out in the second half of the year.

Why are used cars so expensive right now? – because of rising demand and shortage in supply, my friend.

How can knowing why used cars are so expensive help you save money?

It will help you choose your timing better. A lot of people start wondering why are used cars so expensive now because they want to make sure they are making the right decision.

I say this a lot and I’ll repeat once again – it’s all about the timing if you want to get the cheapest deal. If we’re talking about reasonable investments, purchasing a used car isn’t the best decision at the moment.

Since the prices are so high, you’re essentially overpaying for pre-owned vehicles that you could easily purchase more cheaply if it weren’t for the pandemics. Even though we don’t know what’s going to happen, I’m sure the prices will decrease soon enough.

If you don’t need a used car right now, it’s best to wait a little bit and keep a close eye on the trends. If you notice that the value of pre-owned vehicles is plummeting, it will be your chance to get yourself a decent deal.

I know how important cars have become in this day and age, but with the release of the vaccine, we can finally see the light at the end of the tunnel. Therefore, we don’t have to rush our decisions. You can save that money and spend it when the prices are slightly more balanced than right now.

After all, you know why used cars are so expensive and you also know that the situation will alleviate eventually.

Are used cars worth your money?

Used cars are worth your money, but they aren’t necessarily the best investment at the moment. You already know why are used cars so expensive so you understand all the reasons perfectly.

When the prices are normalized, pre-owned vehicles will become cheaper alternatives once again. And that’s when used cars will win back their true worth and value.

Why do people enjoy pre-owned vehicles so much?

They are more affordable

Used cars are usually way more affordable compared to the newer releases. Of course, the prices depend on the condition, mileage, and overall wear and tear. But, as a rule, an average pre-owned vehicle will cost you less than the new model.

They don’t depreciate as much as new models

New cars are attractive with their sleek looks, but they depreciate the minute they leave the dealership. The more you drive, the more value they lose. In other words, you’re washing your money down the drain every single day.

If you purchase a used car instead, you’ll be able to sell it for a reasonable price even after years of usage.

They are cheaper to maintain

On the whole, used cars are cheaper to maintain and repair. If something breaks apart, you won’t have to pay an arm and a leg to fix the problem.

They are more reliable

Used cars are more reliable in the sense that you have more tools to check their durability. You don’t really know if the newest release will live up to the expectations and claims. But with used cars, you can read countless reviews, use specific tools and ask more experienced people for the opinion.

That way, you can easily verify that the car you’re buying is truly durable.


After figuring out why are used cars so expensive, the best thing we can do is to be patient. As things start getting better and more promising, the economic situation will start to improve as well.

Pre-owned vehicles will become cheaper eventually and return to their affordable price tags. There’s no need to panic and rush your purchases – the main thing is to stay healthy. Good luck!