In North Texas and Elsewhere, Used Car Prices Are Probably Going to Keep Rising

Let's say you need a used car and don't have a hefty chunk of change to fork over. Sorry to tell you, pal, but you might not be in luck anytime soon.

One out of the arguably many problems that came out of the COVID-19 pandemic was a shortage of computer semiconductors used in car electronics. These are essential parts of most vehicles, and without enough supply to meet demand, new car production has slowed. Since there aren’t enough being made, the demand for used cars has soared, especially since 2021.

According to the Consumer Price Index, a measure of the change in prices consumers pay for goods and services, even though used car prices dropped briefly early this year from the 2021 highs, they spiked again in May.

According to Consumer Reports, current used car prices are more than 48% higher than they were pre-pandemic.

The index notes that “while almost all major components increased over the month, the largest contributors were the indexes for shelter, airline fares, used cars and trucks, and new vehicles.”

Cox Automotive, the parent company to Kelley Blue Book, AutoTrader and other automotive sales sites, recently put out their 2022 mid-year review. It said the average list price for June 2022 is $28,208 compared with June 2021 at $24,589 and about 30% of the used car retail inventory is in the $35,000 and up range.

"We certainly don’t expect a notable 'drop' in used-vehicle prices — there is no correction coming — but the rapid gains in prices we saw in the second half of 2021 have stopped," Mark Schirmer, director of corporate communications for Cox Automotive, said by email.

"We think demand will remain sufficient well into 2022, as there is little indication of notable inventory improvements in new vehicle segments. And when new vehicle inventory is low, more shoppers are in the used vehicle market," Schirmer added.

The review states that “affordability shifted after chip shortages last year impacted supply in lower price ranges.”

“One challenge for the retail used vehicle market is a lack of older, ‘bargain’ vehicles,” wrote Schirmer. “So consumers shopping for cheap wheels will be challenged to find anything at retail.”

Despite the high prices, people are still buying, and the rising rate of purchases combined with a lack of staff translates to longer wait times at the tax office, which can reach two hours or more in Dallas just to get a registration.

While Texans can renew their registration online 90 days before it expires or up to 12 months after it expired as long as they have not gotten a citation for it, title transfers for new purchases require in-person service.

Dallas County Tax Assessor and Collector John R. Ames has also seen an increase in used car sales and title transfers in Dallas. Many come from out of state from online services like Carvana, he explained, which also takes more paperwork and more time.

“We register about 2.3 million vehicles a year right here in Dallas county,” Ames said. “About 10% of all the cars in the state of Texas are right here.”

Ames added that when a person buys a car from a dealership, they provide the registration. But dealerships also go through the county tax office, so sometimes they will register online, and sometimes they will go to the office needing several registrations at a time.

Ames wants every Texan to know that there are multiple ways they can renew their vehicle registration without going to the tax office including online, by mail or at a grocery store.

“Please, if you can, conduct you business online,” Ames said. “If you feel uncomfortable doing it online, feel free to go to one of our neighborhood locations, go to a Kroger or a Tom Thumb or Fiesta. … We have over 80 different participating grocery stores.