The pandemic has forced people to look for individual mobility solutions, which has led to a massive boom in the used car market.
What many may not realize is that the automotive industry, both during and after the pandemic, is booming. Over the past two years, the demand for personal mobility has increased due to the obligation to maintain social distance and the lack of access to public transport. Even when it started, there were 50% vacancy rules that forced people to use private cars to travel. This was a classic case of mismatch between supply and demand.
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Reasons for the prosperity of the used automotive industry
During the pandemic, two things happened: the demand for cars increased due to the need for personal mobility, and the production of new cars was stopped due to the closure of locks and factories. When demand for anything increases and prices are limited, prices rise. This is a simple macroeconomic principle. Even after the start of production, the supply chain was interrupted. Then the automotive industry suffered for a long time from the storage of semiconductor chips, and the situation is still not normal. This led to a significant slowdown in production, and those who wanted to buy a car could not get one.
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The waiting periods for some cars have been years, and still are for some versions of some cars in some cities. That’s when people started turning to the used car industry. However, availability was limited and there was a great demand, which led to an increase in car prices in the used car market. This, in turn, led to a huge breakthrough in second-hand car sales and the industry prospered. Prices for certain vehicles have risen due to rising demand, and people are willing to pay higher prices to determine the end of their mobility needs.
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These are some of the reasons for the big explosion in the global used car market in the last two years. If you are in the used car market, you should wait as little as possible to get the best deals on used cars. Also, let us know if you know of any other factors that could affect the growth of used car sales.