Shoppers are usually advised against upgrading their vehicles too frequently because of new-car depreciation. Historically, the most fiscally responsible route was to hold onto a car as long as possible and buy a used car instead of a new one — but does this advice still apply amid the ongoing inventory shortage? The dearth of new cars caused a dramatic spike in used-car prices and trade-in values over the last year. This means that your used vehicle could be worth almost as much as its new counterpart today, which can help offset higher new-car prices.
Related: Inventory Shortage Update: Should You Wait to Buy a Car?
Whether it’s in your best interest to take advantage of elevated trade-in values or wait for the inventory shortage to improve comes down to several factors: the car you’re trading in, the car you’re looking to buy, and how long you’re willing (and able) to wait to buy that new car.