Used Cars Can Cost as Much as 8.1 Percent More Than New Version
The global microchip shortage has restricted new car supply, which has led to a record surge in used car prices. According to iSeeCars.com’s latest analysis of over 470,000 new and lightly used cars from the 2019 and 2020 model years listed for sale in June 2021, the price gap between new and slightly used cars has drastically narrowed, and some used cars have even become more expensive than their new versions.
In the first half of June, the average lightly used car cost 3.1 percent less than its new version, compared to the first half of November 2020, when they cost 10.8 percent less. “Used car prices have risen overall, and prices have dramatically increased for certain in-demand models that may be harder to find on new car lots,” said iSeeCars Executive Analyst Karl Brauer. “Dealers may think used car buyers are willing to pay more for the instant gratification of a lightly-used vehicle they can drive right off the lot rather than waiting for a new one.”
iSeeCars has identified 16 cars with used car prices that are more expensive than their new car prices:
Ranked first is the Kia Telluride, which is 8.1 percent more for a lightly-used version compared to its new version. “The Kia Telluride has been a red-hot seller since its debut in the spring of 2019, and dealers have been charging over MSRP because it’s in such high demand,” said Brauer. “The price hikes have trickled down to the used car market, where used Tellurides aren’t yet abundant and buyers may be willing to overpay for a used version that is likely the only one available.”
The Hyundai Palisade, which is a similar vehicle that shares the same manufacturer as the Kia Telluride, ranks ninth. ”Similar to the Telluride, the new-for-2020 Palisade is relatively scarce in the used car marketplace and has sustained its popularity since its debut,” said Brauer. An additional Kia, the Kia Rio subcompact car, ranks fourteenth. “The Kia Rio subcompact car is one of the best cars available in the shrinking subcompact car class that is praised for its quality and affordability, and shoppers who want an affordable used car may be purchasing it without comparing the price of new versions.”
Ranked second is the GMC Sierra 1500 full-size pickup truck. “High demand for the GMC Sierra 1500 coupled with lower production numbers has led to a scarcity of new models,” said Brauer. “The GMC Sierra 1500 is the most expensive pickup for both new and used cars, so buyers who want this luxury truck may be purchasing a used version because it’s available, and dealers are likely adding a premium on the price as a result.”
Two additional pickup trucks from Toyota make the list: the third-ranked midsize Tacoma and the sixth-ranked full-size Toyota Tundra. “Toyota has halted incentives on its new trucks due to lowered supply, and buyers who want these highly sought-after trucks can likely only find used versions,” said Brauer. The trucks are joined by two Toyota SUVs: the fifth-ranked RAV4 Hybrid and the eighth-ranked 4Runner. “Toyota has the leanest inventory among all automakers, and demand for the popular 4Runner off-road SUV has outpaced supply on the new car lot, sending prospective new car buyers to used models,” said Brauer. “The RAV4 Hybrid was notoriously scarce as both a new and used car even before the microchip shortage, and used car shoppers may be willing to pay more for this vehicle as gas prices soar.”
Ranked fourth is the Mercedes-Benz G-Series, commanding $190,078 as a lightly-used vehicle, which is 4.1 percent higher than its new car price. “The Mercedes-Benz G-Class was the fastest-selling new car in May, so buyers who want this extravagant off-roader likely have better luck finding the vehicle used,” said Brauer. “Additionally, most buyers who can afford this vehicle aren’t concerned with the high price tag.”
Two Dodge sports cars make the list including the seventh-ranked Dodge Challenger sports car and the twelfth-ranked Dodge Charger muscle car. “Trade-in values for popular sports cars have soared due to the shortage of new inventory and the popularity of the segment amid the pandemic,” said Brauer.
The Tesla Model 3 makes the list in tenth. “The Tesla Model 3 debuted in 2018 and resale value has remained strong thanks to its impressive technology and performance as well as its relative affordability compared to Tesla’s earlier vehicles,” said Brauer. “Buyers are also likely drawn to buying a lightly used Tesla Model 3 on a lot rather than waiting weeks for the delivery of a new vehicle.”
Two Subaru vehicles round out the list including the Subaru Crosstrek subcompact SUV and the Subaru WRX sports car. “Subaru was one of the automakers most impacted by the microchip shortage, leading to a dearth of new vehicles,” said Brauer.