The Smokin’ Hot Used Vehicle Market
A sizzling market means only one thing, short supply & high demand. The principles of economics don’t change, but the market sure has. One of the factors is the microchip shortage for new car manufacturing, which, according to a recent report by TD Economics, has caused limited supply in the new vehicle market, contributing to the surge in used vehicle prices, which were up 45.2% over last year in the June CPI data – the steepest climb ever.
This begs the question; where in the world can you get the best prices on used cars? Well, we scoured the country to find the highest ticket cars and the best value vehicles. And what we found was surprising. To say that this is a ‘seller’s’ market is an understatement. For one of the first times in history, we are seeing some used cars increase in value. That’s right, appreciate, not depreciate.
Since we are in the midst of one of the most aggressive used car markets in history, you will want to be in the know before you rush off to sell your vehicle to your local car dealer.
When it comes to buying and selling used cars, not all states, or vehicles, are created equal. According to a recent study by iSeeCars, the price increases vary greatly by vehicle type. Here’s the skinny on what’ in demand:
Least Increase In value/Low Demand Greatest Increase In Value/High Demand
Small SUVs, hatchbacks, and minivans Sports cars and pickup trucks
The cars with the smallest price increase are small SUVs, hatchbacks and minivans which makes them the best buy right now and the best to keep since there is not a significant cash cow to take advantage of if you trade or sell. But if you have a sports car, large SUV or a pickup truck - cha ching! If you are not attached to your vehicle or if you would just like to take advantage of a seller’s market, now is a terrific time to trade in your in-demand model.
The question is, where should you buy your next vehicle? We are glad you asked. We combed through data surrounding used car markets in each state. What we found may surprise you.
Rhode Island, Utah, Nevada, Georgia & Montana have the highest increase in used car prices with an average of 22.5% among those states, translating to over $5,000 price increase per vehicle!
Vermont, NJ, W. Virginia, Nebraska and Wisconsin showed the lowest price increase in used cars. Though every state experienced a spike of at least 10.7% , among these five states the average increase was $2,840.. That number gives us cause to pause, almost $3000 increase over last year to purchase a used car! And this on the heels of emerging from the pandemic, with so many consumers still not recovered from their losses or unemployment.
Now more than ever it’s time to be strategic about where and when to buy or trade. If a neighboring state is on the list, consider crossing state lines to get your next car. But before you do, make sure you’ve counted all the costs involved. Afterall, why spend a penny more than you have to. Don’t forget to factor in fuel and the cost of travel to get to the dealer in the next state over. Check into the taxes and fees as they play a part as well.
Bottom line, weigh your options and opportunities to determine the best move while remembering the sound advice of; sell high, buy low! You might just reap some cash rewards.
Automatic is a leading automotive fintech platform serving independent dealers by providing fast, automated, secure and transparent finance solutions, enabling your customers to enjoy their vehicle more quickly with a seamless customer journey. Learn more at https://www.automaticusa.com/