We are happy to say that 2021 was an incredibly good year for selling used cars. As a company that specializes in cash for cars in Orange County and throughout Southern California, we can tell you that used car prices have enjoyed significant growth over the last 16 months. We can also say that the market for your used car remains strong for early 2022.

sell my car orange county

We know that some consumers who have taken advantage of our cash for cars program in the past have been holding off on selling their current used cars. They are waiting for new car prices to come down before they make the move. Looking at forecasts for 2022, that may not be such a good idea. Car prices are expected to continue rising at least for the next few months. Relief may not come until late spring or early summer.

Rising Prices on Both Fronts

One of the reasons waiting a bit longer may not be in your best interest is that prices are continuing to rise on both fronts. But here is what you need to know: prices for good used cars have increased at three times the rate for new cars. According to Goldman Sachs, used car prices have increased 31% over the last 12 months. New car prices are up just 11%.

Think about what that means in the long term. Buying a new car early in 2022 likely means paying more than you would by waiting until summer. But you will also get significantly more for your used car during that time. If you wait until summer, the bottom may fall out on used car prices in response to new car inventories finally catching up with demand.

It may be better to buy now while the price growth ratio is 3-to-1. If you wait until summer, the rate might be 2-to-1 or 1-to-1, in which case you would essentially spend more by getting less for your used car.

If Your Dealer Calls You

You may be among those used car owners who have already received a call from a local dealer. If not, do not be surprised to get a call early in 2022. Dealers are pulling out all the stops in an effort to buy as many used cars as they can. You are likely to get an offer at some point.

In such a case, resist the temptation to jump on the dealer’s offer right away. Call us first. We buy cars in Los Angeles, San Diego, Riverside, Santa Barbara, etc. We may very well be able to beat your dealer’s price. We cannot say for sure, but neither of us will know until you call us.

In the meantime, know that your dealer is desperate for used cars because they cannot get enough new cars to fill the lot. Without cars to sell, they do not have revenue coming in. That is obviously bad for business.

Ongoing Supply Problems

We know that the effects of the COVID pandemic are directly responsible for the steep price increases over the last 18 months. But why are we still having supply issues? The answer is two-fold, beginning with the ongoing shortage of semi-conductors.

Nearly all the semi-conductors purchased by automakers come from Taiwan. At the peak of the pandemic, manufacturing lines in Taiwan and throughout Asia were shuttered. It took a while for them to get back up to speed. But even now, production lines are quick to shut down whenever there is a new wave of coronavirus making its way through the population.

That reality leads us to the second problem: the new Omicron variant of the Covid pandemic. Despite Omicron being linked to a much milder version of the disease (at the time of this writing), governments are panicking. So are businesses. Automakers are fearful that a new wave of Omicron infections will lead to a subsequent wave of production line shutdowns. If that happens, the semi-conductor shortage will only continue.

Summer Relief Expected

If there is good news here, it is that Goldman Sachs expects supply chain and price relief by the summer of 2022. The consensus is that automakers will continue ramping up supply through late winter and into spring. Furthermore, there are now real efforts taking place to bring semi-conductor manufacturing back home. It’s a safe bet that automakers would gladly purchase from domestic manufacturers if they could.

Let’s assume that price relief does come in summer 2022. What does that mean for selling your used car? It could mean a significant drop in value. That is the real kicker if you don’t have a compelling reason to hold onto your car right now.

Any new car price relief realized in summer 2022 will come in the form of dealers being willing to negotiate deals below sticker price. But the sticker price itself is not going to fall. Therefore, consumers are going to pay more for new cars even with price relief in place. Meanwhile, the real price of used cars is going to fall as demand shrinks.

How to Sell Your Used Car Quickly

Has this post convinced you that now might be a good time to sell your used car? If so, you have a couple of options for doing so quickly. Your first option is the one we would recommend: contacting us. Our cash for cars business model means you literally get cash for your used car right away. In many cases, this means the very same day.

Your second option is to sell the car to a local dealer. You will have to make the time to do that. Also realize that you may not get top dollar in a dealer transaction. Remember that your dealer has overhead to consider. They have a lot more costs to build into the profit equation. They might not be able to spend as much.

The market for your used car still looks strong for 2022. If you have been thinking of selling, now might be the time to do so.