Car Prices Have Risen — What Should We Do Now?

According to recent price indexes, used car prices have climbed ~21% year over year, with a sharp spike in April 2021. New-vehicle sales saw a bump in early 2020 vs. 2019, but supply hasn’t kept up—largely due to pandemic-era supply chain disruptions. You can still buy a car today, but it may not be the exact model or trim you want at the price you hoped.

Take a look at our inventory

Shoppers reviewing car prices on the lot

Why Are Car Prices So High Right Now?

  • New-car supply crunch: A global semiconductor shortage limits production and reduces dealer inventory.

  • Demand shift to used: Fewer new cars (and higher MSRPs/markups) push buyers into the used market, shrinking used supply.

  • Rental fleets: Many sold off cars during the pandemic, then started buying used to restock—keeping vehicles out of retail lots.

  • Longer ownership cycles: Owners are holding cars longer and buying out leases, further tightening used supply.

When Will the Madness End?

There have been periods where wholesale prices cooled, but chip-related supply constraints and elevated demand can keep retail prices sticky. Relief tends to be gradual; expect uneven improvements rather than an overnight reset.

Your Options If You Need to Buy

  • Know your car’s value: If you plan to sell or trade your car (or truck), rising values work in your favor. Get multiple quotes first.

  • Shop the overlooked: Consider sedans, hatchbacks, or minivans instead of the hottest SUVs and trucks.

  • Target efficiency and condition: Higher-mileage, well-maintained cars can be great buys thanks to improved reliability.

  • Lease buyout math: If you’re leasing, compare your buyout price to current market value, add taxes/fees, and only proceed if the numbers pencil out.

Buy Now or Wait?

If you can delay, waiting may improve selection and pricing. If you can’t—e.g., for work or school—focus on budgeting, pre-approval, and model flexibility. One bright spot: if you have good credit, interest rates can still help offset higher prices. For ongoing tips, check the Car Plus Finance blog.

Sources

  • Silver, S. (2021, July 15). $30,000 Above the Sticker Price? Why Car Prices Are Going Through the Roof. The National Interest — link

  • Nguyen, T. (2021, May 12). Why are used cars so expensive right now? Vox — link