Please ensure Javascript is enabled for purposes of website accessibility
Some Used Vehicles Now Selling for More Than Original Sticker Price
gvw_ap_news
By Associated Press
Published 3 years ago on
June 22, 2021

Share

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%, 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,” said Yurchenko. “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 (where dealers buy their vehicles) for prices above their original sticker, which is called the manufacturer’s suggested retail price.

Used Vehicle Prices Shoot Up as Inflation Spikes

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% in April and another 7.3% in May, as inflation spiked 5%, the biggest 12-month increase since 2008. The average used vehicle cost $26,457 this month, according to Edmunds.com.

Many of the models Yurchenko found were high-priced trucks and SUVs or highly sought-after loaded-out vehicles, including the high-performance Ford F-150 Raptor pickup, the 2019 Jeep Wrangler Unlimited Rubicon SUV and the boxy Mercedes G-Class AMG63 high performance SUV.

But the two-wheel-drive Tacoma SR is the lowest-priced model of Toyota’s top-selling small pickup. To be sure, higher end versions of the Tacoma also were on the list, but even more mainstream vehicles are selling for more than their original prices. For instance, the 2020 Kia Telluride and Hyundai Palisade made the list even though both are considered good values compared with more expensive SUVs with three rows of seats.

Yurchenko says the crazy prices are moving further into more ordinary vehicles. “Before we get through this, prices for many mainstream vehicles will get closer to their manufacturer’s suggested retail price,” he said.

Pandemic Cut Production and Limited Inventory

It all started in April and May of last year, when U.S. automakers were forced to close factories for eight weeks to help stop the novel coronavirus from spreading. That cut production, limiting inventory even as demand remained surprisingly strong.

The factories came back faster than expected, and in the meantime, computer chip makers had switched to manufacturing semiconductors for phones, laptops, gaming systems and other consumer electronics. That created a shortage of automotive chips, which is forcing car companies to temporarily close factories, leaving some dealers with few new vehicles.

The lack of new vehicles and higher prices have sent more people into the used vehicle market, so demand is high there, too. Plus, rental car companies, normally a source of late-model used vehicles, are keeping their cars longer because they can’t get new ones, Yurchenko said.

At present, consumers who have to replace a vehicle don’t have much choice. “Unfortunately, if you need a vehicle, you’ll need to pay the price,” Yurchenko said.

Signs That Price Increases are Slowing

But there are signs that price increases are starting to slow. Used car prices rose 0.75% last week, the lowest weekly gain in 17 weeks. Trucks and SUV prices grew 0.68%, the lowest weekly gain in 15 weeks, according to Black Book.

Karl Jensvold, owner of PricedRite Auto Sales, a used vehicle dealer in Lincoln, Nebraska, said he’s seeing wholesale prices leveling off, but he doesn’t expect them to drop anytime soon. “I think the normal used car market has reset to a different price point,” he said. “I don’t think we’ll see the prices (from) before COVID for a while.”

Yurchenko said at some point prices will have to go back to normal and used vehicles will depreciate once again. The timing depends on how long it takes to get more computer chips so automakers can resume normal production, he said. “Once the new inventory levels start increasing, that’s where the pressure on the used market will be relieved,” he said.

RELATED TOPICS:

DON'T MISS

Cronenworth’s Big Hit Helps Lift the Padres to a 6-4 Win Over Melvin’s Giants

DON'T MISS

Shohei Ohtani Reaches 3 Times in Home Debut as the Dodgers Rout the Cardinals 7-1

DON'T MISS

Facebook News Tab Will Soon Be Unavailable as Meta Scales Back News and Political Content

DON'T MISS

Stock Market Today: Wall Street Rises to More Records to Close Out Its Latest Winning Month

DON'T MISS

A Fresno County First: Kerman Council Passes Amended Gaza Cease-Fire Resolution

DON'T MISS

UN Top Court Orders Israel to Open More Land Crossings for Aid into Gaza

DON'T MISS

How Involved Is Southern California Consulting Firm in FUSD Executive Dealings?

DON'T MISS

Biden’s Fundraiser with Obama and Clinton Nets a Record $25 Million, His Campaign Says

DON'T MISS

Fresno Unified’s Self-Protection Racket Is Hurting Our Kids

DON'T MISS

Rockin’ Out or Laughing, the Valley Has Its Pick of Weekend Events

No data was found

Facebook News Tab Will Soon Be Unavailable as Meta Scales Back News and Political Content

11 hours ago

Stock Market Today: Wall Street Rises to More Records to Close Out Its Latest Winning Month

11 hours ago

A Fresno County First: Kerman Council Passes Amended Gaza Cease-Fire Resolution

12 hours ago

UN Top Court Orders Israel to Open More Land Crossings for Aid into Gaza

12 hours ago

How Involved Is Southern California Consulting Firm in FUSD Executive Dealings?

12 hours ago

Biden’s Fundraiser with Obama and Clinton Nets a Record $25 Million, His Campaign Says

13 hours ago

Fresno Unified’s Self-Protection Racket Is Hurting Our Kids

13 hours ago

Rockin’ Out or Laughing, the Valley Has Its Pick of Weekend Events

14 hours ago

Ex-Correctional Officer at Women’s Prison in California Sentenced for Sexually Abusing Inmates

16 hours ago

Caitlin Clark and Iowa Draw Nearly 5 Million Viewers for Second-Round NCAA Win

16 hours ago

PGA HOPE at Riverside Golf Course Introduces Military Veterans to the Game

PGA HOPE, now underway at Fresno’s Riverside Golf Course, is designed to introduce golf to veterans and active duty military members t...

10 hours ago

PGA HOPE at Fresno's Riverside Golf Course
10 hours ago

PGA HOPE at Riverside Golf Course Introduces Military Veterans to the Game

11 hours ago

Cronenworth’s Big Hit Helps Lift the Padres to a 6-4 Win Over Melvin’s Giants

11 hours ago

Shohei Ohtani Reaches 3 Times in Home Debut as the Dodgers Rout the Cardinals 7-1

11 hours ago

Facebook News Tab Will Soon Be Unavailable as Meta Scales Back News and Political Content

11 hours ago

Stock Market Today: Wall Street Rises to More Records to Close Out Its Latest Winning Month

12 hours ago

A Fresno County First: Kerman Council Passes Amended Gaza Cease-Fire Resolution

12 hours ago

UN Top Court Orders Israel to Open More Land Crossings for Aid into Gaza

12 hours ago

How Involved Is Southern California Consulting Firm in FUSD Executive Dealings?

MENU

CONNECT WITH US

Search

Send this to a friend