Friday, June 21, 2024

Why Have Used Car Prices Increased

Don't Miss

How To Jump Start My Car

What Is My Car Worth Nada

How To Match Car Paint

How A Car Engine Works

Bmw Z4 366% Average Increase

Why have used cars increased in value so much?

Rounding out cap hpis top 10 is the previous-generation BMW Z4. Again, the clamour for convertibles rears its head with the Z4 seeing an average increase of 36.6%.

Whether or not the bubble will burst remains to be seen, but theres no doubting the difficulties in getting new cars is having a positive effect on those selling on the used market.

Used Car Prices Continue To Soar

Chip shortage turns new-car buyer attention to used cars and prices jump 35% in a year

By Neil Dowling on 23rd July 2021Dealerships, Free Access Articles, Moodys Analytics, Used-cars

The analytic companys used-vehicle price index, that follows a mix of used cars, shows monthly sales growth rates have slowed as availability of vehicles becomes scarce which has led to prices that are well above expectations.

The data is also reflected in the latest AutoRadar reports from Cox Automotive Australias data solution division that this month said the average prices being achieved by dealers for used cars has increased by $8000.

Moodys Analytics said its research had shown prices had also jumped 10 per cent compared with the beginning of the year and trends show buyers are preferring passenger cars to utes as fuel prices rise.

Moodys Analyticss senior economist Michael Brisson said one of the key reasons for the strength of the used-vehicle market was the global semiconductor shortage as buyers face long delays in receiving their new car.

He said the chip shortage has decreased the number of vehicles shipped into the country, driving up the price of any vehicle people are willing to sell and this supply issue continues to put upward pressure on both new and used-vehicle prices.

The supply constraint was further exacerbated by the record rate of new-vehicle sales in Australia in April, he said in his Australia Used-Vehicle Second-Quarter Price Report.

Why Could This Impact The Price Of Used Cars

It may come as a surprise to you but many of the online car buying services are actually owned by the leading motor auction houses in the UK.

  • Webuyanycar.com – British Car Auctions
  • Moneyforyourmotors.com – Manheim Group
  • The Car Buying Group – Aston Barclay

Also, some of the large motor dealer groups also offer direct car buying services for the public, like Evans Halshaw and Arnold Clark.

The overall effect of this is that the routes for car dealers to buy used car models is now restricted. This drives competition for the stock and then can drive up prices.

Don’t Miss: How To Connect A Car Amp To A Wall Plug

Other Stories You May Find Helpful

Gasoline prices in the Southeast surged after the pipeline hack, but L.A. is not immune to gas woes. Nancy Rivera Brooks reports on why Californias gas prices are so high.

Fitness company Pure Barre charges job applicants $1,800 for their training. Columnist David Lazarus explains why employment lawyers consider this a class-action attorneys dream.

Bitcoin, dogecoin, NFTs, GameStop is this the peak of investment absurdity? columnist Michael Hiltzik writes.

Are 529 college savings plans still worthwhile? Certified financial planner Liz Weston breaks down their value, especially for grandparents.

Ready to travel again? Youre not the only one considering a national park road trip, Hugo Martín reports.

Six figures from freelancing? SideHusl.coms Kathy Kristof writes about a platform that she says can make gig work lucrative.

Truck And Suv Segment

Why Hyundai Is Better Than Porsche or Jaguar

We also have more granular data on the truck and SUV market.

Similarly to the car segment, we see the greatest price increase among the sub-compact and compact segments. This is again because those vehicles are at lower price points, making them more attainable for a broader buying audience.

Minivan prices are increasing at above average rates as well, and we expect that to continue. Minivans and full-size vans experienced truly remarkable appreciation earlier this year, and we would not be surprised to see that again.

Don’t Miss: How Much Does A Car Salesman Make Per Car

Volkswagen Beetle Convertible 415% Average Increase

Weve been stuck inside for a year, and many of us just want to simply treat ourselves now the world is opening back up. Theres not much better way to do that than with a convertible and thats reflecting in values.

The biggest mover is the final generation of the Volkswagen Beetle Convertible, with an average increase of 41.5% in value.

With no return of the Beetle in sight, this could be destined for future classic status too.

Dealers Paying More Means Youll Pay More

The Manheim Used Vehicle Value Index tracks the prices car dealers pay at auction for used cars. It rose more than 5% in September alone. Used car wholesale prices now sit 27.1% higher than one year ago.

The average used car was listed for nearly $26,000 at the end of August. An increase in wholesale prices means that figure is likely to rise when Septembers numbers are final.

A worldwide shortage of microchips has pushed new car prices to record highs. Automakers have slowed or stopped the production of many cars because they cannot find enough chips to make them. But buyers have continued to snap them off of sales lots. That causes prices to rise.

High new-car prices push some shoppers to look at used cars instead. That sends used car prices soaring.

Cox Automotive Chief Economist Jonathan Smoke explains, The new-vehicle production problem worsened instead of getting better in Q3. Used inventory issues were further exacerbated by damage to vehicles caused by Hurricane Ida in late August, putting pressure on an already historically tight market.

Cox Automotive is the parent company of Kelley Blue Book.

Also Check: Electronic Title Transfer Florida

Why Are Used Cars Prices Going Up Right Now

Used cars are going up in value. What is next, snow in June?

Normally we expect used cars to go down in value over time but the opposite is generally the case right now. Why are used cars going up in value, and not down as in the past?

During the month, Cap HPI data released to CarDealer early revealed values increased by 3.7 percent at the three-year mark – that’s worth £477 per car.

That meant second hand car prices rose every month, for six months, to August.

To further put the rise into context, the average used car has increased in value by around 20% in the last five months alone.

There are many reasons why used car prices have been increasing steadily in the last few months, and these include:

Mercedes Sl 38% Average Increase

Why Used Car Prices Are Skyrocketing!

Big, convertible Mercedes are usually a magnet for depreciation so the rise in used car values might be an opportunity for you to cash in if youre planning to shift your SL.

Values of the luxo-barge convertible have increased by an average of 38% in the last 12 months perhaps one thats not here to stay, either.

You May Like: How Much Does A Car Salesman Make Per Car

Suzuki Jimny 61% Average Increase

The Suzuki Jimny is a cult favourite how can you not love this cutesy 4×4?

Its problem is supply and demand, though. The latest generation of the car was hard to get a hold of when it was on sale, and now you can only buy it as a commercial vehicle rather than a passenger car.

Its no real shock then that those wanting Jimny kicks have turned to the previous generation, and values are rocketing as a result an average increase of 61%.

The Website Reckons Sustained Demand For Second

The record price growth currently seen in the used car market is set to continue over the coming months, according to online marketplace Auto Trader. The popular website says the average price of a used car had increased by a massive 15.2 percent year-on-year earlier this month, and the rises show no signs of stopping.

Auto Trader claims it saw more than 15.8 million people visit its site during the week beginning August 9 up by almost a third compared with the equivalent week in 2019, before the coronavirus pandemic struck. The company also claims there was an 18-percent increase in the hours customers spent researching vehicles on the Auto Trader site compared with pre-pandemic levels, while the number of leads sent to sellers grew 68 percent.

According to Auto Trader, this already exceptional level of used car demand has also been boosted by supply issues that plague the new car market. With manufacturers struggling to produce cars during a global semiconductor shortage, Auto Trader says would-be new car buyers are venturing into the second-hand market.

The company says a study it conducted earlier this month found nearly half of new car buyers would not be prepared to wait for more than a month for their preferred vehicle. And 74 percent of respondents would be open to purchasing a used alternative if their brand-new choice wasnt available within the desired time-frame.

More on the used car market in the UK:

Read Also: Milk Smell Out Of Car

Used Car Values Surging Under Increased Demand From Semiconductor Shortage

Was this article useful?

Used cars are in high demand as the supply of vehicles remains restricted by the global semiconductor shortage.

Fleets and leasing companies are holding on to vehicles for longer, as new models are increasingly delayed meaning fewer vehicles are entering the used car market.

The issue is compounded by retail buyers, who are facing the same challenges to acquire new vehicles.

A survey by What Car? found 31% of used car buyers were originally in the market for a new car, but switched to the used market for better access to vehicles and to reduce their spending. This is an increase of 7% since June.

Steve Huntingford, editor, What Car?, said: The microchip shortage is causing a substitution effect in the new and used car market, with new car buyers increasingly switching to the used market in search for better deals and availability.

The consequence of this has been increased upwards pressure on used prices, as well as stock limitations for some dealers, which in return is making it harder for some used buyers to find the right car. Its a negative cycle which can only be expected to ease once the microchip shortage is resolved.

Every car- and van-maker is being impacted by the computer chip crisis, with some delivery times for cars lengthening from three to six months, and many new vans not expected to be delivered until 2022.

Related content by tag :

Top 10 Used Cars Rising In Value 2021

2020 Nissan Frontier Gets A Massive Price Increase

July 16, 2021byRyan Hirons

Its no secret that used car prices are on the rise and for quite a few reasons.

With everyone emerging from a year of lockdown, many of you with cash saved up and a desire for an adventure, the demand for cars has seemingly never been higher.

With microchip shortages causing lengthy delays in new car deliveries though, its the used market seeing a massive boom in value.

Which cars are benefitting the most, though? Well thanks to new data from cap hpi, carwow can reveal the top 10 used cars rising most in value over the last 12 months.

Also Check: How To Buff Out Scratches On Your Car

Ford Mustang Coupe 372% Average Increase

Just like its convertible counterpart, the Ford Mustang coupe has seen a rise in values on the second-hand market over the last 12 months.

Its not quite as much as the drop-top sibling at 37.2% showing just how strong demand is for convertibles at the moment but its an impressive figure nonetheless.

When Should I Sell My Car To Make The Most Money

This begs the most important question of all When should I sell my car to make the most money?

Learn how to sell your car for the most money possible! Read: Car Trade in Tactics for Success

While we expect used car prices to continue to increase until the third quarter of 2022, we would not be surprised if we see a peak in prices in the spring of 2022. Spring is typically the season where used car prices are at their highest. While seasonality has not played a major role in used vehicle prices in 2021 , we still would not be surprised if used car prices peak during this time.

If you plan to sell or trade-in your vehicle we recommend tracking your vehicles valuation on an ongoing basis.

Read Also: How To Notarize A Car Title In Az

Used Car Prices See Biggest Month

Posted by: ellisdavies in Latest NewsMonday, 4 October 20210

This is the biggest month-on-month rise this year, according to the latest Market View from eBay Motors Group.

The average list price of the top 50 makes and models advertised on Motors.co.uk increased by 6.5% to £13,504, up from £12,682 in August.

The biggest increases were recorded in the franchised sector, up 7.7% from £15,083 to £16,243, followed by car supermarkets that saw averages rise 6.8% from £13,928 to £14,881.

Independent retailers saw an increase of 5.8% from £8,820 to £9,331.

Increasing wholesale values, coupled with ongoing high consumer demand, saw strong advertised price performances for mainstream and prestige models with the average price of a Ford Focus seeing its average monthly price rise 4.4% to £17,249, representing a £2,847 increase since January and an astonishing 21% increase year-on-year.

Similarly, another strong performer during September was the Audi A3, which saw its month-on-month price jump by £1,684, or 6.3% to £28,350, a year-on-year increase of 18.2%.

Dermot Kelleher, head of marketing and research at eBay Motors Group, said: The used car market continues to experience an intense period of diverse market dynamics, with some strong price rises being driven by unsated buyer demand, combined with ongoing restrictions in stock supply.

Cars priced from £10,000-£15,000 and £15,000 to £20,000 sold fastest, in 31 and 32 days respectively in September.

Will The Used Car Price Increase Bubble Burst

When will used car PRICES come down | Why are car prices GOING UP | Dont BUY a CAR | A Car BUBBLE

The current situation is driven by the lack of new cars being built. It then stands to reason that the situation will change when the issues with new car manufacture eases. As more new cars are built and filter through to the dealers then the interest in used cars may fall quite quickly.

The likely outcome will then be a sharp fall in value in used cars in general, possibly over a short timescale.

However, is that the whole story?

There could be a hangover for people who have bought a used car during this inflated period on the values. By paying at the height of the valuations, they could see a rapid fall in the trade in value of the vehicle. This could be accentuated if they have taken the car on finance and this means they owe more on the finance settlement than then vehicle is actually worth. This ‘negative equity’ could prevent some people from changing the car at that point.

You May Like: How To Remove Hail Dents From Car

Some Used Vehicles Now Cost More Than Original Sticker Price

When it was new, the window sticker price on a typical 2019 Toyota Tacoma SR double cab pickup was just under $29,000. Two years later, dealers are paying almost $1,000 more than that to buy the same vehicle, even though it’s used.

Then they’re selling it to consumers for more than $33,000.

Welcome to the wacky world of U.S. car and truck sales, where the pandemic and a global shortage of computer chips have pushed prices to record levels.

In the past year, used vehicle prices on average have climbed 30 percent, according to Black Book, which tracks car and truck data. That’s created many crazy situations where high-demand vehicles are selling for more than they did when they were new, said Alex Yurchenko, the company’s senior vice president of data science.

The market is very strange right now, Yurchenko said. Dealers need the inventory, so they are paying lots of money for their vehicles on the wholesale market.

Yurchenko has found 73 models of 1- to 3-year-old vehicles being sold at auctions for prices above their original sticker, which is called the manufacturer’s suggested retail price.

Used vehicle price increases accounted for one-third of the large rise in inflation last month, according to the Labor Department. Prices shot up a record 10 percent in April and another 7.3 percent in May, as inflation spiked 5 percent, the biggest 12-month increase since 2008. The average used vehicle cost $26,457 this month, according to Edmunds.com.

Auto Trader Says Values Are Up By More Than 12 Percent

UK second-hand car values are growing at record rates in 2021, according to data from online used car marketplace Auto Trader. Using the roughly 400,000 vehicles advertised on the site as a guide, the company estimates average prices were up 12.6 percent year-on-year during the week commencing July 12.

According to Auto Trader, that means prices have risen for 63 consecutive weeks, and price rises are accelerating. During the week commencing April 12, prices rose by what Auto Trader called a comparatively conservative 5.7 percent.

The company claims this is due to an increase in demand among consumers following the outbreak of the coronavirus pandemic. Auto Trader says it saw 14.7 million customers visit the site during the second full week of this month, up by almost a quarter compared with the same week in 2019, the summer before the pandemic arrived.

Similarly, the organisation says there was a 14-percent increase in the hours consumers spent researching their next car on site, and the number of leads sent to dealers grew 54 percent compared with the same period in 2019.

Furthermore, Auto Traders data also showed retailers were able to sell cars more quickly, with stock remaining on forecourts for an average of 23 days during the week before last. That compares with 43 days at the beginning of 2021, although the country was thrust back into lockdown in January.

More on the UK used car market:

Read Also: Safest First Car For Teenager

More articles

Popular Articles