According to the car buying site iSeeCars, there are currently 16 models that will cost you more used than new.
It is, how to say, unusual. And, of course, not good news for the used car buyer.
It’s all part of a larger trend – in June, according to iSeeCars, the average lightly used car was 3.1% less than the price of its equivalent new car. In November 2020, the difference was 10.8%.
âUsed car prices have increased overall, and prices have increased significantly for some in-demand models that may be more difficult to find on new car lots,â said Karl Brauer, executive analyst at iSeeCars, in the article. “Dealers may think used car buyers are willing to pay more for the instant gratification of a little-used vehicle than they can drive directly instead of waiting for a new one.”
Unsurprisingly, the chip shortage that has led to a tight supply of new cars seems to be at least in part to blame.
The list of 16 vehicles is led by the Kia Telluride, which can command an average of 8.1% over new, at around $ 47,000. The new average price on Telluride is around $ 44,000.
Other vehicles on the list include GMC Sierra, Toyota Tacoma, Mercedes-Benz G-Class, Toyota RAV4 Hybrid, Toyota Tundra, Dodge Challenger, Toyota 4Runner, Hyundai Palisade, Tesla Model 3, Honda Civic, Dodge Charger, Honda Odyssey, Kia Rio, Subaru Crosstrek and Subaru WRX.
All of them except the G-Class are considered âmainstreamâ models, and while some of these vehicles can get expensive, only the G and Sierra are truly considered luxury models. We’ll also note that the Civic is on the verge of transitioning to the 2022 model year, so there is a possibility that the outgoing generation Civics will be in short supply regardless of the chip situation.
We should also note that the Telluride has been a popular seller since its launch and given that the launch was in 2019, there probably aren’t many used of it. Brauer further notes that the RAV4 Hybrid could be popular due to high gasoline prices and that Tesla is making the listing likely as a way for Tesla buyers to avoid waiting weeks for a new car.
Most of the models on the list are also relatively popular. The exceptions would be the G-Class (a luxury toy for all of Beverly Hills), the Tundra (often overlooked in favor of the competition), the aging 4Runner, the sometimes forgotten Rio, and the long-in-the-tooth WRX. .
This makes sense: if the supply of new cars of sought-after models is small, buyers will seek out models that are little used, and this desirability will drive up prices.
However, it also reverses conventional wisdom. Until recently, buying a well-maintained used car was often seen as a way to get a nearly new vehicle at a lower price without suffering depreciation.
Now, however, the combination of popularity and the tight supply of new cars has messed the market up, at least temporarily. Forecasters see a return to normal once the chip shortage is resolved. Once models like the Telluride and Palisade become available new from the factory in large numbers, those who prefer not to settle for a used vehicle will go back to buying new. This will make lightly used cars less desirable and lower prices.
Madness, fortunately, can be temporary.