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Are Used Car Prices Going Up Again?

BY: Adam Karner
Used car salesman showing a vehicle to a customer

During the COVID-19 pandemic, prices for vehicles, both new and used, skyrocketed to levels that have rarely been seen. Spurred by the supply chain shortage that affected the auto industry, increased demand and lower supply caused higher prices within the automotive field.

For a short time, it seemed as if prices were finally starting to stabilize at their high level. However, recent news in the industry regarding prices and federal reserve interest rate announcements have caused consumers to wonder if prices will be back on the rise. Stay current on the industry’s recent news to identify when the best time to buy will occur.

Recent News on Used and New Car Prices

For those who have been holding out hope that the price for American used and new vehicles is falling, you will be disappointed. Recent data indicates that prices for used cars, on average, have risen above $40,000, which is close to all-time highs. The price for new cars has not risen as rapidly as new cars, but the average price for a new vehicle is still hovering around $10,000 higher than used cars at $50,000, according to Kelley Blue Book (KBB).

The primary driver behind the increase in used car prices, but stabilization in higher new car prices, is due to inflation. When new car prices began to rise and inflation started to increase, consumer demand for used vehicles due to their (at the time) lower price increased. This resulted in subsequent price increases for used vehicles that are still continuing.

When Will Used Car Prices Drop?

The federal reserve has been making an active effort to reduce the higher prices automakers such as Honda, Tesla, Subaru, and other car dealers are charging, but it is a slow process. While the supply chain shortage that caused the original increase in vehicle prices during the pandemic has been relatively stabilized, the federal reserve has been trying to target the increased demand in the used car sales market.

This effort involves aggressive interest rate hikes that make borrowing more expensive for consumers and businesses alike in an effort to reduce demand. Once demand falls, prices should begin to stabilize in the used car market. However, the effects of the federal reserve rate hikes will not be seen for a number of months. Therefore, it’s not likely that used car prices will significantly drop until the end of 2023 or early 2024.

Used Car Coverage with Endurance

When purchasing a used car, it’s more than likely that dealerships won’t provide an automaker warranty with the purchase. As a result, your used vehicle will be left unprotected from potential breakdowns that may occur. Adding an extended warranty package to your used vehicle from Endurance can save you both time and money. There are three main packages to choose from depending on your used vehicle, or you can also customize your own coverage online.

1. Secure Plus

Designed to offer affordable protection that any driver can make use of, the Secure Plus package offers stated protection for older vehicles. With the most vital components of your vehicle being protected, you can rest easier. Additionally, there is added protection for components beyond the engine. The parts covered under this plan include:

  • Air conditioning system
  • Brakes
  • Drive axle
  • Electrical components
  • Engine
  • Hybrid coverage
  • Steering
  • Transfer case
  • Transmission
  • Turbo/Supercharger

2. Superior

For those who are looking for protection that goes a little further, the Superior plan by Endurance offers high-level state component coverage. This particular package includes coverage for electronics, including the option to add on high-tech protection. In addition to all of the coverage the Secure Plus package offers, the Superior plan also offers coverage for:

  • Cooling system
  • Suspension
  • Fuel system

3. Supreme

Finally, the Supreme plan offered by Endurance offers exclusionary coverage that provides a plan holder with near bumper-to-bumper coverage. With almost every part under the hood covered, this package includes parts as small and intricate as gaskets and seals. Being compared to Titanium and Diamond packages on the market, this plan can cover nearly anything that may break down under the hood.

As you consider the different types of extended warranty packages above, think about the needs of your used vehicle. Consider the number of miles on your vehicle, along with factors such as the age of your vehicle, to determine how likely a breakdown is and the extent of protection your vehicle needs.

When it comes to keeping yourself and your vehicle safe on the road, it’s important to consider how you drive on a daily basis and your vehicle’s history.

Protect Your Vehicle with Endurance Auto Warranty

Whether you choose to purchase your used vehicle now or you decide to wait a couple of months (or next year) to see if prices begin to fall, it’s important to ensure your new purchase is protected, especially if you pay a price that meets record highs. The best way to ensure this is to add a comprehensive extended warranty plan to your vehicle that offers component protection and maintenance coverage.

Endurance has paid $287 million in customer claims since 2012, which means by using one of our extended warranty plans, you know you can have peace of mind out on the road regarding breakdown protection. Additionally, for a small activation fee, each Endurance contract comes with Elite Benefits that offer bonus perks, including reimbursements for up to two tires per year due to road hazards, key fob replacement, total loss protection up to $1,000, and much more.

To find out more about how Endurance can help protect you and your vehicle, call our award-winning customer service team at (800) 253-8203 and request a FREE quote, or shop online today.

You can also continue reading up on the latest automotive news; car, truck, and SUV comparisons; electric vehicle reviews; and more on the Endurance blog.

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