Cars right now are going through a weird period almost all cars are going up in value by over 20% but why? Well, it all has to do with one single part that almost nobody can get there hands on with a production time of 5-6 months cars will be expensive for a while.

In fact, “we haven’t seen prices like this since 1953 where used cars that should always be going down in value as more wear and tear happens to the car but in 1953 and 2021, we are seeing the opposite happen” but why now?

The first reason is the semiconductor shortage, semiconductors have a lot of use in modern cars for features like power steering, backup cameras, emergency braking, cruise control, and any monitor in your car.

But semiconductors have more use than just cars in fact almost any electronic needs semiconductors phones, computers, tv’s, cameras, etc. All need semiconductors to function as advertised.

“Semiconductors are low because when the pandemic hit, transportation wasn’t as needed as people were working from home and not going out as much, so car production slowed.”

But other electronics were selling like hotcakes, so the semiconductor companies changed clients to big electronic companies and disregarded the car companies.

But as the vaccine came out and people needed to drive to work again demand in cars went up and companies couldn’t handle it and ordered more semiconductors to meet the demand.

“The pricing has been driven up by a few things supply is one of them, but I also think it’s been driven up by tax refund money and additional stimulus money, so I think it upped the consumer demand because now they had some more money in their pockets,” on explained the CarMax CEO.

Another reason used cars are going up in value is because new cars are too expensive for normal people with them being 35k-55k most people can’t put their entire salary into a car.

It also has to do with public transportation, since the pandemic many people don’t trust or use public transportation and instead are getting their own cars to avoid the virus and stay safe.

If you want a car hold off till prices drop and if you want to sell do it now because semiconductors won’t be in shortage for forever and eventually people will resort back to public transportation all though in shorter numbers.