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Junk Car Prices Shooting Up in 2022

Junk Car Prices Shooting Up in 2022

Car prices, whether for new or used vehicles, have never really made consumers happy. If you get one from a dealership, there are all kinds of extra fees that mysteriously appear on the invoice by the time you get around to signing on the dotted line. If you buy a used car from an individual, there could be a sneaking suspicion that they’re selling you a lemon at an inflated price. These days, however, the situation is even worse – the price of vehicles is soaring, no matter what condition they’re in.

This is bad news if you’re trying to buy a vehicle, but if you’re looking to sell one, there couldn’t be a better time to do it. Getting cash for cars is easier than ever; even if you have a junk car, you could still get paid for it by a company like CashForCars.io.

As it turns out, once you’ve gotten used to having a car as your primary mode of transport, it’s hard to go back. Even though there are alternatives (such as public transport, bikes, or motorcycles), they haven’t done much to lessen the demand for vehicles, no matter how hard it is to find them. According to a 2014 study, 88% of Americans owned a car, while only 14% of them owned a motorcycle. While that first number may have wavered a bit since then, it’s pretty clear that most people are reluctant to do without.

So, what happens when you can’t find a new or used car that fits your requirements? If you’re like some people, you think outside the box – and start looking for a junk car instead. Here are five reasons why this is becoming an increasingly appealing alternative.

1. Public transport didn’t seem like a safe option
The pandemic has affected the demand for cars in more ways than one. Even though prices were rising, increasing numbers of people shelled out for whatever used car they could find in order to stop using public transport in the middle of a pandemic. Since everyone had the same idea at once, though, this put a huge strain on the used car supply – resulting in skyrocketing prices.

As the availability of cheap used cars dwindled, people started turning to junk cars instead. Even if the car wasn’t operable at the moment, it could be after some repairs. Replace a few parts and get the vehicle to pass inspections, and they’re good to go.

2. Accidental savers decided to spend their money on a used car

Old Jaguar Emblem

Taken on Pixabay

Not everyone who bought a used car did it so they could avoid using taxis; some of them made the purchase because they realized that it was suddenly within their budget. They were inadvertently saving money every month by essentially never leaving the house, so whatever they would have spent on restaurant bills, vacations, trips to the mall, and Friday night drinks was all staying in the bank. With the extra money adding up, a used car seemed like a timely purchase.

This trend was most apparent in 2020, when the COVID-19 restrictions were at their harshest. Once businesses started opening back up (and used cars became harder to find), the lockdown savings slowed down significantly.

3. Worldwide semiconductor shortages affected the auto industry

Why can’t we just make more cars to meet demand? These tiny parts called semiconductors, which have been in short supply ever since the pandemic kicked in. Due to production delays – and the fact that each vehicle needs an average of 2,000 semiconductors – the entire automotive industry has been struggling to meet the demand for quite a while.

In some cases, people ended up buying a used car simply because they couldn’t find a new one in the make and model they were looking for. They might not have saved that much money, though. In 2021, used car dealerships were already reporting that the prices of certain brands, such as Ford, Ram, and Aston Martin, had increased by up to 30% between May 2020 and May 2021. Where did people turn then? In some cases, to junk cars.

4. The end of strict lockdowns triggered a surge in car purchases

When everyone was relying on delivery services just to get their groceries, you can bet that very few people were picking up used vehicles. Once the lockdowns started easing up, though, everyone who had been delaying their car purchases started coming out of the woodwork – and that was on top of all the people who would have been buying vehicles anyway.

Junk Car Prices skyrocket

Momentmal on Pixabay

As both new and used cars were snapped up, junk cars became the next-best option. Some people bought junk cars just for the spare parts, which would allow them to fix up the vehicle they already had. Others were able to get their hands on vehicles that only barely failed their inspections, or that needed just a bit of work in order to be roadworthy. Even if they wouldn’t start at the time of purchase, it was only a matter of time and money before they were fully functioning – or close enough, anyway.

5. Supply channels for new and used cars became disrupted

It’s easy to see how production issues would drive up the prices of new cars. In May 2019, the average vehicle cost $37,185 new; in December 2021, the average vehicle cost $47,243 new, an increase of just over $10,000. Even so, sky-high prices haven’t done much to discourage demand.

The supply of used cars slowed down as well, as leasing companies held onto their fleets, and fewer individuals were willing to swap out their used cars for new ones. Since it was virtually impossible for some people to find used cars, junk cars started looking like a viable alternative.

With so much uncertainty in the used car market, junk car sales are filling the gap.

Between supply shortages and price hikes for both new and used cars, junk cars may be the only available option – meaning they’re looking more appealing to consumers than ever.

What’s the good news here? There is no time better than the present to get rid of your old car and roll that cash into a motorcycle. Read more about finding a good deal on your next motorcycle.