Why Is It So Much More to Ship a Car in 2021 than in Previous Years?

In a previous blog post, we discussed how auto transport companies got affected with COVID-19 and what to expect in 2021.  Now that we are 5 months into 2021, we clearly see that the viral pandemic has triggered a cascade of price hikes throughout America’s auto industry- surge that has made both new and used vehicles unaffordable for many.

Prices of new vehicles far outpaced overall consumer inflation over the past year. In response, many buyers who were priced out of that market turned to used vehicles. Yet their demand proved so potent that used-vehicle prices soared even more than new ones did.

The Effects of the Pandemic

Supply

The main reason for the exploding prices is a simple one of economics: Too few vehicles available for sale during the pandemic and too many buyers. The price hikes come at a terrible time for buyers, many of whom are struggling financially or looking for vehicles to avoid public transit or ride-hailing because of the virus. And dealers and analysts say the elevated prices could endure or rise even further for months or years, with new vehicle inventories tight and fewer trade-ins coming onto dealers’ lots.

The supply shortage arose last spring after the coronavirus hit hard. Automakers had to shut down North American factories to try to stop the virus’ spread. The factory shutdowns reduced the industry’s sales of new vehicles and resulted in fewer trade-ins. So when buyer demand picked up late in the year, fewer used vehicles were available.

Gas Prices

The automobile industry has historically responded to rising gasoline prices by using these periods as opportunities to manufacture smaller, more fuel-efficient cars, such as hybrids and, most recently, all-electric cars that can travel up to 250 miles between charges. Consumers have largely supported this move; sales of hybrids and all-electric vehicles in the United States has been on a strong upward trajectory since 2010, while sales of gas guzzlers like large trucks and SUVs have lagged behind.

Ship A Car in 2021

Covid

Of course, the virus that began the pandemic is one of the most obvious reasons why costs have increased.  The Wall Street Journal spoke with dealers about the vehicle crunch that started with the production halts from a year ago as the pandemic hit. The paper found that local supply is decidedly wanting compared to the number of vehicles the dealers usually have on hand. The industry had hoped to get back to relatively normal in 2021, but that isn’t what’s happening. Data from Wards Intelligence shows that the number of vehicles at or in transit to dealerships was down 26 percent in February 2021 compared to the same month in 2020. For pickup trucks, the number was closer to 50 percent. That all leads to a few unfortunate realities for anyone looking to buy a new car soon: you’re likely looking at fewer choices on the lot, higher prices, or a longer wait time for your car to arrive.

In all conclusion, the beginning of the pandemic caused many auto transport companies to come to a complete stop, causing the car inventory to be extremely low compared to before the pandemic. With less inventory is what leads to increased prices.

Please feel free to contact us at Ship A Car Inc. at 954-821-4555 for more information. We are here to make you feel the most comfortable and secure during the transporting process.

Find this post useful? Share it with friends!
Read more
  • Why Car Depreciation Rates Matter
    Useful
    Why Car Depreciation Rates Matter

    A car represents one of the biggest purchases that you'll make. Given that Kelley Blue Book says the average new car in the U.S. cost $38,723 in September 2020, you should appreciate and protect your ride as much as possible—by keeping it in the best condition possible, for instance—so that it does not depreciate too rapidly.

  • The Ins and Outs of Motorcycle Shipping
    Useful
    The Ins and Outs of Motorcycle Shipping

    Whether you bought a new bike on the other side of the country, or you want to move a couple hundreds of miles away, we are here for you. Ship A Car will help you figure out how to safely ship a motorcycle, help you get rates from reliable transporters and give you tips on preparing your bike for its journey.

  • Are You Relocating to A New Place? Here are Some of the Things to do Before You Make the Big Move.
    Useful
    Are You Relocating to A New Place? Here are Some of the Things to do Before You Make the Big Move.

    Make sure you hire the services of a trusted auto transport shipping company in order to avoid any kind of issues that could take place while relocating to a new destination.

  • How Much Does It Cost to Ship a Car from Texas to California?
    Useful
    How Much Does It Cost to Ship a Car from Texas to California?

    You may think it will be better to drive the car yourself. But the average cost of you moving your vehicle to your new home will be around $800 to $900 +. You might be wondering why it costs so high even if you are driving the car yourself? It would help if you understood that you have to calculate the hotel, food, and gas you will burn to drive your car. Besides the price, you will also be wasting three to six days of valuable time. So, professional car shipping companies like us would be a better choice. You can get a plane ticket, go home within a few hours, and wait for your car to reach your destination. It is always better to have Ship A Car Inc. do the job rather than do it yourself and possibly damaging auto parts.