Did You Know?

Though many people have happily put the COVID-19 pandemic behind them, lingering issues related to the pandemic continue to affect individuals in unique ways. That's especially true for drivers looking to replace their existing vehicles. In the early days of the pandemic, efforts to contain the spread of COVID- 19 led many auto manufacturers to cease production at their factories. Semiconductor chip shortages related to the pandemic also led to factory closures. One of the ripple effects of those closures was a reduced inventory of new vehicles, which led individuals to look to the preowned market when they needed a new car. That increased the value of trade-ins, including trade-ins of leased vehicles. The automotive experts at Edmunds note that the average trade-in value of a vehicle leased in 2020 was 19 percent higher than the predetermined residual value, so lessees had greater incentive to keep the vehicles when their leases expired than in years past. That further affected the supply of preowned vehicles on the market, which Cox Automotive reports has led to a spike in the cost of preowned vehicles in 2023. The Manheim Used Vehicle Value Index indicates that, by mid-March 2023, wholesale used vehicle prices had already increased by 8.8 percent, a trend that Cox forecasters expected to continue as the year progressed.