“Well a couple of years ago you could pick up a [used] five speed BMW for like three to $500, and now the same thing in the same condition is two grand to $3,000” said local auto mechanic Tanner Newport.

As ridiculous as this may have seemed pre pandemic, now this is the new reality of the used car market.

This major increase in price can be brought back to the old law of supply and demand. According to one article from the Washington Post, the price of used cars has risen by about 30% since January of 2019, before the pandemic.

This major increase of price can’t be due to inflation alone, but is mainly because of the decrease in the availability of used cars. As was shown in the same article in the Washington Post, the availability of used cars started the decrease in January of 2020, the beginning of the onset of the Pandemic.

Why is there such a shortage in used cars?  Consumers have turned to used cars because of the shortage of new cars.  The new car market is down to about a third of what it used to be pre pandemic.

Another question might be why is there such a shortage of new cars being made? When the pandemic became the main global focus, most non essential industries (auto makers and chip manufacturers, among others) were shut down, ceasing the production of essential components used to produce cars, mainly microchips, causing an obvious reduction in the supply of new cars crashing in the market.

While this reduction would have been temporary, as the reopening of these industries would get the market flowing again, a problem with microchip production had been coming for a long time before the pandemic. This impending problem was only made worse by the pandemic, causing a huge deficiency of microchips for new cars, which then led most to turn to used cars and create a major demand wrecking the used car market as well.