When COVID hit us, the market for new and used vehicles was relatively balanced, healthy. But then came the supply chain issues and more.

Why are used vehicle prices rising fast?

If you were paying attention in basic economics class in high school or college, it's not that complicated. Lower supply plus increased demand means higher prices. But it is more than that.

Supply chain issues not helping

As we head out of the pandemic, although a lot of people are back working (those who want to) we are still facing lengthy backlogs with new vehicles. Drive by any new vehicle dealer in our region and you will see lots of empty slots. The slowdown caused by COVID policies has made a mess of the new car industry, especially with computer chips.

Most experts say compute chip production will not reach pre-pandemic normal levels until perhaps 2023. That means a lot of new cars which have already been built can't be driven.  One used car dealer in Kennewick told us there are huge lots in Texas and other locations where thousands of brand new vehicles are parked, ready to go. However, they don't have computer chips. The latest vehicles utilize as many as 8 or 9 of them, and without them, the vehicles will not run...period.

  Demand for pre-owned has shrunk the market

According to JD Power online,  the national average cost of a used car (purchased from a dealer) had risen to a record high of $21,558. That's about $1,500 more than what my wife and I paid for her brand new Outlander Sport in 2019! .

In late 2020 and especially 2021, savvy used car dealers, including some in our area, snatched up as many pre-owned vehicles as they could at auctions and through trade-ins. The value of pre-owned began to rise. Then new car dealers began to try to fill in their holes by outbidding the smaller dealers at the auctions, sometimes paying twice what the value of the vehicle was.

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The shortage of new and pre-owned made the used prices rise.

Technology and new emissions requirements haven't helped.

Edmonds, the car experts, says the average price of a brand new car (including electrics) is $45.596.  The average price of an electric vehicle is now $60.054, both figures are from February data.  You see the ads on TV, new vehicles look like spaceships with all the new tech. While soaring gas prices are making some people look at electric vehicles, most of their prices are beyond what many Americans can afford.

So, we turn to pre-owned. But so are a lot of other folks, and until the auto industry returns to 'normal,' used prices are going to be high....very high.

LOOK: See how much gasoline cost the year you started driving

To find out more about how has the price of gas changed throughout the years, Stacker ran the numbers on the cost of a gallon of gasoline for each of the last 84 years. Using data from the Bureau of Labor Statistics (released in April 2020), we analyzed the average price for a gallon of unleaded regular gasoline from 1976 to 2020 along with the Consumer Price Index (CPI) for unleaded regular gasoline from 1937 to 1976, including the absolute and inflation-adjusted prices for each year.

Read on to explore the cost of gas over time and rediscover just how much a gallon was when you first started driving.

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