Pandemic-Era Car Shortages Continue to Drive Up Prices for New and Used Vehicles
The COVID-19 pandemic's disruption to car production has created lasting effects on the U.S. auto market, with approximately 8 million vehicles never manufactured during pandemic years, continuing to constrain supply and inflate prices. Automakers prioritized profitable high-end vehicles during production constraints and have maintained this strategy, while also reducing leasing and incentives that previously supported the used car market. The shortage has priced out many consumers, with new vehicle buyers now requiring household incomes over $150,000 compared to the national average of $80,000.
The U.S. car market continues to experience elevated prices for both new and used vehicles as a direct result of pandemic-era production disruptions. Approximately 8 million vehicles that would have been manufactured for U.S. buyers during the pandemic were never produced due to shutdowns and supply chain issues, according to Cox Automotive's chief economist. Automakers responded to constrained production by focusing on higher-margin vehicles like trucks and SUVs, a strategy they have largely maintained. Additionally, the industry reduced leasing programs (which fell from 30% to 18% of new vehicle sales at their lowest point) and incentives, further tightening the supply pipeline to the used market. Sales volumes have recovered from pandemic lows of 13.8 million vehicles in 2022 to 16.2 million in 2025, but remain significantly below the 2016 record of 17.55 million. Industry forecasts predict continued constraints over the next three to four years, with used car prices remaining elevated despite consumer pressure from inflation and stagnant wage growth relative to price increases.
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How pandemic car shortages are still making new and used cars expensive
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