Do NOT buy a Car Right Now! Explained
By Lauren Fix, The Car Coach®️
Buy a used car. Sit on it for a year. Make a huge return! Well maybe, according to iSeeCars' newest study, used car prices in April increased an unparalleled 16.8 percent, or $3,926, over last year in the wake of the microchip shortage.
Read my Bottom Line statement at the end, I’ll tell you how to make a few bucks.
So, what is the deal?
Typically, when you buy a new or used car, it depreciates or loses value from the moment you drive it off the lot. There are some exceptions, like a Ferrari, Ford GT, Porsche GT3 and similar exotics or hard to find vehicles. You can make money on selling certain vehicles, but you need to choose wisely.
Fast forward to 2020, production of new vehicles stopped during COVID. As production ramped back up, some cars made it to the lots and then there appeared a chip and rubber shortage. This lead to a new car shortage and directed buyers to used cars instead as their leases became due. We instantly saw used car prices increase and those high prices have remained in place and will until the chip shortage is resolved, which could take quite a while. It looks like the end of the year before things change.
Some vehicles have had higher price increases than average--which makes them the worst vehicles to buy now while lucrative trade-in opportunities could be a huge moment maker. Other cars defied the trend by either decreasing in price or by only slightly increasing, proving that not all used car shoppers have to significantly overpay for a vehicle.
Here are the Top 10 Cars with the greatest price increases year over year from iSeeCars April 2021 study:
10 - Land Rover Range Rover Sport prices up 25.1%
9 - Mitsubishi Mirage prices up 25.9%
8 - Toyota Tundra price up 26%
7 - Chevrolet Camaro prices up 26.7%
6 - Chevrolet Silverado 1500 truck prices up 27.1%
5 - Mercedes Benz S-Class prices up 27.9%
4 - GMC Sierra 1500 prices up 28.6%
3 - Ram 1500 truck prices up 28.8%
2 - Mercedes-Benz G-Class prices up 33.2%
1 - Chevrolet Corvette prices up 33.9%
According to iSeeCars.com’s latest analysis of over 1.2 million used car sales in April 2021, used car prices increased 16.8 percent, or $3,926, compared to the same period the previous year.
Here’s the bottom line?
New cars prices do not offer many incentives, discount or finance deals. The current used car price increase is unparalleled, and prices will likely remain elevated for the foreseeable future due to the magnitude of the global microchip shortage and restricted new car supply. Used car deals are hard to find, they are still out there, or at the very least, there are used car models that won’t come with as much sticker shock.
The top ten vehicles with the greatest price increases range from 1.5 to 2.0 times the average vehicle’s price increase, and are primarily pickup trucks, sports cars, and luxury cars. If you’ve every thought you wanted to make some money buying and selling used cars, now is the time! That is if you buy the right vehicles.
If you have additional questions, put them in the comments below and I'll be happy to answer.
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