Now more than ever, used car values are higher, with several contributing factors. This is frustrating for car shoppers and car manufacturers with no easy or fast resolution within sight. This post will highlight four significant factors that affected the Nada Car Value.

A.    Impacts of pandemic

The advent of the corona virus in late 2019 affected many lives and industries. The automotive industry had its share as people stopped buying new cars. The reduced demand for new cars caused companies to shut down operations and relieve workers of their duties. As a result of this unpalatable decision, the Edmund's Used Car Value reduced. People are now buying cars post-covid, yet the supply chain remains disrupted.

B.     Manufacturing slowdowns

The manufacturing slowdown is a significant factor affecting the production of Kelley Blue Book Car Values worldwide. You can easily trace this to the US-China trade war. Tariffs between China and the United States have increased the cost of manufacturing materials, impacting automakers. Manufacturers never predicted that the manufacturing slowdown would last long; now, activities by car producers have further reduced.

C.    Shortage in microchips

Even after resuming operations, car manufacturers are poised with a significant challenge – microchip shortage. According to AlixPartners, the semiconductor chip shortage was estimated to cost the global automotive industry US 210 billion in revenue in 2021. While many automakers have thought of developing their own microchips to mitigate the shortage, only Tesla has had a breakthrough. Shortage in microchips will further impact car value by VIN as well as the production.

D.    Loose monetary policy and low-interest rates

In the automobile industry, monetary policy sets the tone for the economy. A loose monetary policy affects the money supply in an industry. Since the automobile industry already has a large amount of debt, lowering interest rates can impact debt servicing, net exports, business expansion, and other conditions that directly or indirectly affect aggregate demand. At high-interest rates, auto jobs are fewer, and manufacturers will have more unsold cars. Auto jobs are in abundance at low-interest rates, implying that cars will be more affordable.

Depending on who you are, the Nada Black Book Value of cars can be pleasant or unpleasant news. As the prices of new cars keep soaring high, consumers are opting for used cars. If you want to sell your car, now is a good time perhaps, your car may be worth more now than when you purchased it.

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