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SALT LAKE CITY – The COVID-19 pandemic impacted the supply chain. Natural disasters impacted the supply chain. And make no mistake, the war in Eastern Europe is also going to impact the supply chain – which may exacerbate the abnormally high auto prices.
We have been talking about high car prices for two years now as people have been holding off on buying a new or used car, and that is not likely to change anytime soon.
"So, our analysts are saying there are some headwinds," said Emilie Voss, of the vehicle history report service Carfax.
She said the microchip shortage that nearly killed new car manufacturing early in the pandemic continues to hamper the industry, especially considering the omicron variant surges. The war in Ukraine and sanctions on Russia will compound the issue. Russia is the world's largest producer of palladium, a metal used to manufacture catalytic converters for cars.
All that stalled manufacturing of new cars has also trickled down to the market for used cars. According to new data shared with the KSL Investigators, it is already having a bigger impact than you might think.
Right now, the average listing price from a dealer on Carfax used car listings is about $28,000 nationwide. That is up by about 40% compared to the same time last year. The price margin is not quite as steep in Utah, still Carfax data shows used car prices are up about 26% in the Beehive State.
The warning from Carfax is some consumers are feeling so pressured to buy quickly, they are skipping the once-over by a mechanic: never a good idea when buying used.
"If you're going to buy that car sight unseen, maybe a couple states over," said Voss, "make sure you can hire an inspector in that market."
Before the Ukraine invasion, auto experts expected car prices to start coming back down around the fall season. Now, it is anyone's guess.
