By on June 7, 2021

We’ve been covering the staggering increase of automobile pricing all year, starting with the second-hand surge created by rental industries sucking up used models to replace all the vehicles they dumped during the pandemic. A year of suppressed demand and prolonged restrictions absolutely crippled supply chains and placed the automotive sector in an extremely difficult position going into 2021. We wish we could say things were improving but the most heartening news we’ve come across was the possibility that select manufacturers might soon have a line on semiconductor chips — hopefully encouraging new vehicle production.

But the used market is still heading into uncharted waters. According to data collected by CarGurus, the typical price for a used automobile increased by about 30 percent against this time last year. Though more worrying is how much of that spike is consolidated within the last 90 days.

While no segment or brand has managed to avoid price inflations, used pickup trucks saw the largest increases with today’s average transaction swelling to 44.21 percent larger against 2020 rates. The rest hovered between 15 and 31 percent, with rates depending almost entirely on the popularity of the body style. Electric vehicles also saw an increase in value on the secondhand market, despite having one of the worst deprecation curves imaginable. Still, most data sheets we saw had used EVs trading at prices only a few percentage points higher (e.g. 6 percent for Tesla) than they would have been this time in 2020 while minivans had gone up in value by 22 percent.

While the list has some defunct brands (e.g. Saturn) seeing huge boosts in valuation, it’s likely more useful to keep tabs on existing brands. High-volume companies seemed to see the largest increases in pricing and pickup-centric nameplates tended to be at the top of the curve. Secondhand Ram, Ford, GMC, and Chevrolet products were all trading ownership at rates over 37 percent higher than this period in 2020. So was Aston Martin, which isn’t known for pickups and kind of mucks up the theory. The rest of the pack still saw sizable pricing increases over the same timeframe, with only premium Italian brands and Tesla managing to stay below double digits on the used market.

But not every study was as grim as the one furnished by CarGurus. Though it could be due to most of them not having figures from May and the pricing increase seemingly hitting the hardest over the last two months. In fact, valuations actually dipped slightly at the start of 2021 before commencing their ascension in the middle of March. We’ll be watching to see if outlets like iSeeCars and Cox Automotive paint a similar picture later this month.

Though we doubt they’ll be putting together a report that looks contrastingly sustainable. Pricing is getting out of control and if things don’t turn around soon, the big problem will be about things more immediate than how much money people are willing to spend on their next vehicle.

[Image: LM Photos/Shutterstock]

Get the latest TTAC e-Newsletter!

60 Comments on “Used Car Prices Have Increased 30 Percent...”


  • avatar
    geo

    I bought a 2011 Ford Ranger 4×4 in September for $13,200. It had only 44,000 kilometers on the clock, so I figured I got a good deal. I sold in February for $16500. Now, I find out I could have gotten well over 20k for it so I’m kicking myself. Prices for trucks especially are going through the roof around here.

    • 0 avatar
      geo

      And it also doesn’t help that anything of value in Canada is often snapped up by Americans looking for a deal, taking advantage of the exchange rate.

      • 0 avatar
        redapple

        GEO

        I call BS on you.
        Border closed.
        USA buyer cant get your ‘product’ in Canadia.

        • 0 avatar
          Scoutdude

          It isn’t the US consumers that are buying those vehicles and taking them home. It is the Canadian dealers who continue to ship their cars to the US wholesale auctions like they have always done with late model vehicles so some extent or another.

          Here is one company that I used to drive by daily which specializes in exporting cars to the US. https://www.linkedin.com/company/crossborder-vehicle-group/about/

          • 0 avatar
            Lie2me

            ^ This is true, when I went shopping for a car last fall I was shocked at the number of Canadian used cars I ran into

          • 0 avatar
            Luke42

            When I was shopping for an unusual pickup truck (2009-2013 Chevy Silverado Hybrid / GMC Sierra Hybrid), I was surprised by how many of the trucks I ran Carfax reports on had been owned by Canadians.

            I’m really glad someone owned them, because I greatly prefer the hybrid driving experience in a pickup truck — and the one I bought cost about 25% of what I’d have to pay for a new F-150 Hybrid. Thank you, Canada!

        • 0 avatar
          geo

          A used car dealer acquaintance told me before COVID that the Americans were keeping his business alive. Another dealer told me that American business had driven prices up 30 percent and that Americans were “lined up to buy cars” at some outlets. Hearsay, I know.

          I’m not sure how (or if) this affected prices after COVID, but it sure seemed to set the ball rolling.

          • 0 avatar
            Scoutdude

            Exporting late model used to the US has been going on heavily, at least in the PNW for many years.

          • 0 avatar
            redapple

            Stand Corrected.
            Apologies

            Question tho.
            Cars with mechanical speedo.
            Canada – KPH
            USA – MPH

            US DOT Requires MPH

          • 0 avatar
            Scoutdude

            Cars with digital odo have a way to switch between the two, either a dedicated button or in some menu. Most speedos are dual marked if the aren’t digital.

            A 2010 Fusion we used to have was one of those lease returns imported from Canada. I did find that when the battery was disconnected it would default to metric upon rebooting but it took all of 10-15 seconds to go into the menu and switch it back.

            Now back in the day part of the import process was to convert the speedo and there were shops that did that work. I ran across a couple years ago that had a sticker on the door jamb noting that the speedo had been changed upon importation per what ever federal regulation.

          • 0 avatar
            Art Vandelay

            I think my C5 does the kph/mph elegantly. You hit the english/metric button and the backlight changes from mph to kph and the needle adjusts accordingly. No tiny numbers for one or the other and no digital nonsense.

  • avatar
    slavuta

    I would think that current energy policy and increasing fuel price would lead to pickup/solid axle SUV prices go down while smaller, more efficient cars go up.

    • 0 avatar
      Scoutdude

      Again you don’t seem to understand how the world works. This isn’t about the price of fuel or energy policy it is about the gap between the haves and have-nots that increased during the pandemic and recovery.

      In other words those with money still have money and they aren’t afraid to spend it. Meanwhile those in the middle that still have money are afraid to spend it and those that didn’t have much have less than before and are holding on to it.

    • 0 avatar
      Luke42

      @slavuta,

      If all other things were equal, an increase in fuel prices would main a decrease in demand for large vehicles.

      However, that’s not the case, because several things are changing at once:

      * Vehicle supply is constrained due to the chip shortage. Even if demand shrinks, if supply shrinks more, the prices still go up.

      * Work-from-home means people like me aren’t as concerned about MPG because commuting is no longer the main source of mileage. I’m an efficiency nerd and Hybrid/EV fan. However, I’m a member of the work-from-home class, and the fact that I don’t need to commute changes my requirements rather dramatically. Buying a GMT900 hybrid, instead of a small commuter car, ticks all of the boxes for me in WFH-world — because I use my vehicle mostly to haul people and stuff, rather than for commuting. I use much less gasoline than I did prior to WFH, even though I have a less efficient (but more capable) vehicle.

      Your model would make a useful forecast if you could hold all other things equal. However, all other things are not equal. This stuff is as complicated as real life. Who knew?!?

      • 0 avatar
        28-Cars-Later

        “I’m a member of the work-from-home class”

        I genuinely find this comment interesting… members of a social class.

        • 0 avatar
          chuckrs

          As opposed to tradesmen and factory workers with physical presence required by job duties, yes, WFH workers are a different social class.

          I am on my way to becoming a member of the Lounge Around At Home (LAAH) class – retired. My current work commute is from the bedroom to the living room to use a VPN to access a work computer and some months go by with only a few hundred miles added to car mileage. People like me should retard the price increases somewhat.

  • avatar
    Scoutdude

    I’m not sure how much of this is due to actual price increases and how much is due to the have vs have not.

    I’m guess it has a lot to do with the have vs have not increasing the ratio of near new used vehicles vs older used vehicles in the market place. Leases continued to end giving a reasonable supply of late model used cars. Meanwhile those in the middle are more likely to be holding pat and waiting things out. So the supply of the 5-6 year old trade ins is down. The fact that many people reduced the amount of miles driven also factor into this. Not only on the older used side where it helps people feel comfortable with standing pat but also on the lease return market where vehicles are getting turned in with much lower miles than expected giving them a boost in value.

    To get the full picture we need to know how the average age, mileage and model/trim level has changed over the past year.

    Yes used car prices are definitely up I’m just not so sure that those numbers reflect the increase of specific vehicles.

    • 0 avatar
      dal20402

      I’m skeptical. This spike in prices seems too broad, with prices up in every category. My own two newest vehicles—one late-model and low miles, one 5 years old with relatively high miles—have both appreciated substantially in the past three months according to KBB.

      My read is that a combination of pent-up post-pandemic demand, rental companies snapping up all the late models they can get their hands on, and the chip shortage has just created a supply problem at the high end that reverberates all across the market.

      • 0 avatar
        Scoutdude

        I agree that in general it is basic supply vs demand economics, but I do think a lot of it is also due to a change in who is buying and selling and who isn’t buying and selling.

        I’ve seen that a lot in Seattle area Real Estate. The number of ~$1m homes selling for cash is way up. Meanwhile in many lower price segments the ratio of vacant homes vs occupied homes has swung in favor of vacant homes. Some of it is people cashing out of rental properties. Some of it is due to those people who payed cash selling off their old home. However it is mostly due to people who need to sell to buy staying out of the game due to fear that they won’t be able to find a desirable replacement in a timely manner.

    • 0 avatar
      Luke42

      My mental model of this is that the following things are happening:
      1) New car production is constrained due to the semiconductor shortage. New car prices go up.
      2) Used car supplies are constrained, due to the lack of new cars turning into used cars. Used car prices go up.

      The haves vs. have-nots issue is in play (have-nots buy used cars formerly owned by haves) for sure, but I think it’s only part of the story. If it were the whole story, the new car market would be mostly undisturbed.

      • 0 avatar
        28-Cars-Later

        Point #2 has been going on since 2014, everyone thought the lease glut 2012-15ish would eventually hit the market and bring a balance but it never really happened.

        I mostly agree on Point #1 but a percentage of it is a complete lack of oversight on the financing companies. How about, no you can’t sell a 96 month loan on a *vehicle*. If someone is going to sign a note for a 96 month car payment, they are not a qualified buyer; period. Given high demand, its not as if every unit is not going to be sold so by allowing that unqualified buyer to compete is adding to the competition of qualified buyers. Just like FHA 3% notes for 600 FICO in real estate, though they may not be as much of a problem these days.

        96 month no joke, as low as 3.99% no less!

        72 months back to MY12, which is now nine years old. How is that possible? Gosh I’ll finally have this paid off when its 15 years old, happy days!

        https://www.joviafinancial.com/personal-banking/borrow/auto-loans

      • 0 avatar
        Scoutdude

        The haves vs have nots certainly is not the only factor, the short supply of new is certainly a major influence on increasing new and used car prices.

      • 0 avatar
        dal20402

        Rumor keeps having it that the rental companies are also buying up A LOT of available very-late-model used inventory, likely at desperation prices so they can honor a bunch of upcoming full-price reservations. That and the chip shortage alone are almost enough IMO to explain current market conditions.

  • avatar
    BrandX

    Does anyone proofread this stuff? Wow. You have errors in both the first two sentences.

    • 0 avatar
      Matt Posky

      While I have been told someone still edits articles before they’re published, I have my doubts that this takes place with any consistency. Thanks for the heads up.

  • avatar
    ajla

    The Vroom offer on my 2018 Stinger is 15% higher than it was in August 2020.

    • 0 avatar
      dal20402

      Interesting. This inspired me to go get a Vroom quote on my Highlander and it is $2000 above KBB. If I didn’t have next month’s road trip scheduled it would honestly be tempting to jump on it and just have the Bolt for a while, then buy another second car when the market gets more reasonable. They are apparently desperate for cars.

      • 0 avatar
        Scoutdude

        We just gave our daughter our C-Max Energi and have our fingers crossed that things will get more reasonable in the not too distant future and we will replace it then. Just makes sense with the daughter back to in person work and driving ~400mi per week vs the ~500mi per month we had been putting on it.

  • avatar
    Kendahl

    I looked up the private party values of our fleet at kbb.com. The Infiniti and the Focus are up a bit. What surprised me was the seven-year-old AWD Sienna LE. It’s worth nearly $20k!

    The best way to help alleviate the shortage is to hang onto what you already own for another year or two. I was thinking about replacing the Infiniti this fall with either a Tesla Model 3 Long Range or a VW Golf R. If I do, it will be fall of 2022, not 2021.

  • avatar
    SCE to AUX

    New car dealer lots near me are draining inventory. Seems like the upstream material shortages are starving the factories and the dealers, so people go and buy used, thus driving up used prices.

    Can someone say if ATPs are up on new cars? I’d imagine that new car dealers aren’t going to negotiate much with high demand across the board.

    All of this is why I’m willing to fix my older cars, and why I might just buy out my lease. I can keep it for less than its trade-in value.

  • avatar
    gasser

    Other factors are also in play in the rising prices for used vehicles. 2020 had a very minimal usage of cars. If you had a 3 year lease thats ending now, in reality you only have 2 years worth of mileage on it, so it’s worth more, and priced accordingly. Also, I have friends whose car leases are coming due, but with so low mileage on the car and an increase in new car prices (plus sometimes unavailability of what you want), they are buying the vehicle. This means fewer lease returns for sale on the lots. Also there was/is a savings in maintenance. I recently had a lot of time related work done on my 17 year old Lexus and the dealer was not very busy and was very willing to haggle over prices.

  • avatar
    Dan

    You’d almost think that abruptly turning off great swaths of the just in time economy in combination with banana republic level money printing had consequences.

    I got lunch across the street from the Ford dealership this afternoon. They had three new trucks on the entire lot, two of them were 80 000 dollars and the third a 55000 dollar extended cab. Used is stupid expensive because used is all that’s left.

  • avatar
    28-Cars-Later

    I’ve never crunched the numbers but there is probably a ratio between different vehicle classes and their new equivalents. My guess is those ratios have all increased by a factor of at least one in part because they track against new car prices. Since I only expect new vehicle prices to increase, these wholesale figure should only increase and even if there is an equilibrium with new car pricing I doubt used wholesale will fall back to the previous ratios. This will be because everyone will be sitting on expensive used inventory and won’t be able to absorb the fall… so they simply won’t be selling them which will perpetuate the used supply shortage.

    This is basically what happened later last summer and fall, anyone (dealers) who bought in late May/June/July was really sitting on too highly priced inventory. So what happened? Many didn’t sell and that’s when I first started hearing about dealers not being able to source inventory. This is only going to get worse, the only thing which might pop a hole in this bubble would be for interest rates to rise. I don’t see JPow or Mr. Yellen allowing this to happen. Maybe they could engineer a fail of one of the sub-subprime banks which would spook them and then market rates could rise? Not a silver bullet but could cool the inflation down maybe for a time.

    Build back better, comrades! I don’t expect this “chip shortage” to be resolved until the Fall (or perhaps Summer) of 2024. Hopefully the other Biden shortages are a distant memory before then. Oil will be the interesting commodity to see if there is a “shortage” of. I do think if they pull the lever on it, food would follow, and then we’re looking at the scenario many including I feared in early 2020. I really, really hope these psychopaths realize if they go too far it will be not years but decades of recovery.

    • 0 avatar
      swester

      Not resolved until Summer 2024? Oh, come on. It’s like the same alarmist nonsense when people were saying we wouldn’t have a vaccine for 3-4 years.

      Guess what? When business interests are at stake, people come up with some pretty impressive solutions to seemingly intractable problems. I give it another 6-12 months max until we see headlines like “What ever happened to the so-called chip shortage?”

      And it’s quaint when people blame shortages on Biden, as if global geopolitical and economic trends suddenly change course when a new American president takes office. By your logic, I guess then it’s fair to call it Trump’s virus and blame those 500k deaths on him, right?

      • 0 avatar
        dukeisduke

        I agree – I’m no Biden fan, but I can’t blame this or gas prices on him. He could really screw things up in a couple of years, but this stuff isn’t his fault.

      • 0 avatar
        28-Cars-Later

        Intel CEO Pat Gelsinger:

        “Lesley Stahl: I’m wondering, if we’re going to continue to have shortages, not just in cars, but in our phones and for our computers, for everything?

        Pat Gelsinger: I think we have a couple of years until we catch up to this surging demand across every aspect of the business.”

        https://www.cbsnews.com/news/semiconductor-chip-shortage-60-minutes-2021-05-02/

        “Guess what? When business interests are at stake, people come up with some pretty impressive solutions to seemingly intractable problems. I give it another 6-12 months max until we see headlines like “What ever happened to the so-called chip shortage?””

        I said the same thing, and logically in say a 12 month time period it should show signs of progress. So this started in the fall of last year, so Q4 would be approaching a year and maybe we will be saying, “gee, that chip shortage was no big deal”. I’m thinking given who is in power, that won’t be happening but I hope I am wrong.

        “And it’s quaint when people blame shortages on Biden, as if global geopolitical and economic trends suddenly change course when a new American president takes office. ”

        Really now? So when I had to hear “Trump’s fault” for four years the actors needed to realize global geopolitical and economic trends do not suddenly change course when a new American president takes office? Funny, I don’t recall that occurring. Here’s hoping the Biden shortages will dissipate in a few months, but I must confess I am a tad cynical on that actually occurring.

        “I guess then it’s fair to call it Trump’s virus and blame those 500k deaths on him, right?”

        Well I would expect as such from the brainwashed masses, despite the fact it originated in the PRC and the PRC *did nothing* to stop the flow of it out of their country. Oh and the true number of direct COVID deaths in 2020 will never be known, so you may as well attribute every death of the year to it because those figures are transitory after all.

  • avatar
    orobertscab

    In February 2021 I bought a 2019 Colorado crew cab LT 2wd (13,000 miles) for $23,500. I sold the truck to Carvana last month for $30,225 and purchased a new 2020 Ranger XLT 4×4 for $29,400, Carvana will pay me $34,150 for the Ranger should I decide to sell. In my 46 years of vehicle buying nothing like this market has existed and I am sure it will not last beyond the summer. If you have a late model truck and can find a new replacement the used truck values are insane.

    • 0 avatar
      Scoutdude

      I have seen reports of people who sold their cars to Carvana seeing them listed for less than what they were paid for the car. So either Carvana is trying to show volume to investors, they are making the money on the note, or both.

    • 0 avatar
      puddleJumper

      Seems to me there might be a business… Buy new and sell it to Carvana before the first payment comes due. But of course, I’d get caught holding a brand new car I never wanted…!

    • 0 avatar
      swester

      Carvana (and the others like Vroom, etc) is a venture capital backed firm that doesn’t need to worry about running a profitable business (yet). It’s a smoke and mirrors game to acquire things like “users” and transactions” that are what drives further rounds of investment. That’s partly why we are seeing these insanely inflated values.

      This WILL crash at some point, and IMO things are already much too frothy.

  • avatar
    APaGttH

    My wife and I had a 2017 Buick LaCrosse as a rental in 2017 – FWD model with every option box checked except the sunroof and the 20″ wheel package with active dampers.

    We were really impressed. It was a tremendous highway cruiser in particular and a very underrated car.

    In 2018 I picked up a fully optioned AWD model (every option box checked) with 24K miles on it for $26.7K. It stickered for $51K 18 months earlier. (long story on why I bought it in the first place, I’ll spare you)

    For giggles I looked on Craig’s List to see local dealer and Carvana pricing.

    Great googly moogly – appears I could private sell for $22K – $23K tomorrow.

    • 0 avatar
      dal20402

      I very much enjoyed the loaded, HiPer-equipped LaCrosse I had as a rental on a spring 2017 trip to Nashville. It had a really German-ish level of refinement. You made a good decision.

  • avatar
    islander800

    I’ve read that used Honda Elements in good shape have had about the highest percent retained value of any make. My 2004 West Coast vehicle (ZERO rust), always maintained (fluids, belts, hoses replaced as per schedule) with just over 60K miles on the odometer must be worth a small fortune now – my Honda service rep joked when I had it in last that I could probably get almost as much as I paid new. But I think I’ll keep it, as it still drives like a 4-year-old vehicle at 17 years and counting. (I’ve read other comments here about horrible Honda dealer service experiences of problems with Hondas. We’ve had nothing but Hondas since 1986 and they have always been problem-free and service great….)

  • avatar
    Jeff S

    Not a good time to buy a vehicle. Putting less mileage on my vehicles during all of 2020 and the first 5 months of 2021 I can wait for several years before I buy any vehicle.

  • avatar
    ajla

    If you all think that your vehicles are worth a lot right now you should check out the value of your homes. Rocket boots man.

    • 0 avatar
      swester

      True, but homes have historically been appreciating assets, whereas the vast majority of cars are not.

      A situation where used cars are selling at or above their MSRP when new is…(to use an overused word) unprecedented.

      I’d say the smart money, if they have the ability to do, would be to sell now and wait until prices inevitably revert to normal (and when it does, that’s going to happen FAST).

    • 0 avatar
      SaulTigh

      We were saving for a house in 2019 and my wife put her foot down one day in the spring and basically demanded that we buy a house because she “couldn’t live like this” anymore, because our old place was small. So, we took the leap and bought in July of that year with only 5% down. The value in my neighborhood has gone up so much that I’m getting the PMI taken off my loan as soon as the appraiser finishes his report. Right place, right time, and if I’d done it “the old fashioned way” we’d be paying increased rent and be no closer to buying a house even with 2 additional years of savings.

  • avatar
    swester

    I give this bubble phenomenon another 6-12 months max, and mainstream articles like this suggest that we’ve already seen the peak. This is being fueled by a perfect storm of low inventory, high demand and VC-fueled firms like Carvana/Vroom paying silly money for cars simply to justify their growth.

    When inventory inevitably comes back, and interest rates start to rise, HOO BOY you better believe this inflated market is going to collapse quickly.

    The smart money is selling off that 2nd or 3rd car they don’t really need right now and waiting this out.

    • 0 avatar
      SaulTigh

      What’s the old adage…”the market can remain irrational longer than you can stay solvent?” I personally have lived my adult life in a low interest rate environment. I’m probably never going to be willing to take out a 5-6% car loan or a 7% mortgage. Those were once “good” rates. I don’t see any modern politician being willing to raise interest rates enough to break inflation any time soon.

      I also have a theory that the elites are allowing this to happen because they can withstand it, and it’s an easy way to raise wages without, you know, actually raising wages.

  • avatar
    dukeisduke

    This has really screwed things up for our family. It’s just about time to buy a first car for Daughter No. 3, and the Kia Forte that was $5600 a year ago is now $8000.

    The only upside at the moment is that Daughter No. 2’s 2014 Forte is at the body shop for a driver’s side sideswipe repair, and the estimate went from GEICO’s $2000, to the body shop’s estimate + supplement of $4500. I’m hoping that the value of the car has increased enough to prevent it being totaled – there’s no structural damage, it’s just that GEICO left a lot of stuff off of the estimate (what else is new?).

  • avatar
    teddyc73

    The man with dementia in the White House and his puppet masters will solve the problem. I’m SURE of it.

Read all comments

Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • ajla: Are the production issues sorted out on the Bronco then?
  • sirwired: ?However, we’ve seen enough testing conducted beneath sunny skies where driving aids still allowed vehicles...
  • whynot: I’d say more Jeep and all their Wrangler special editions. Obvious why.
  • Astigmatism: From what I’ve read, they’re targeting assembly capacity of 40,000 vehicles in the first...
  • SCE to AUX: Ford is copying RAM’s marketing formula.

New Car Research

Get a Free Dealer Quote

Who We Are

  • Adam Tonge
  • Bozi Tatarevic
  • Corey Lewis
  • Mark Baruth
  • Ronnie Schreiber