Used Car Prices Have Increased 30 Percent

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]