You can spend up to $6,300 more on a used car than a brand-new one.
We all know the new and used car market is currently a dumpster fire due to several parts shortages, the most famous of which is the ongoing semiconductor chip shortage. While we can't wait to not write the words "semiconductor chip shortage" ever again, the effects on the market are fascinating.
Jerry, an insurance savings app, recently compiled a study looking at used car prices and found that used models are worth more than brand-new models. How is this possible? Consumers don't like to wait, and waiting is an unfortunate reality for buying a new car these days. The 2022 consignment of the best-selling vehicle in the USA, the Ford-150, was sold out before we hit the middle of the year. And we've known for a while now that used Teslas are worth much more than new models.
Jerry has identified seven lightly used 2021 ICE and hybrid models worth more than brand-new 2022 models. It also identified three lightly used EVs that are worth more.
The calculations were done by taking the average price of several used models and comparing it against the MSRP of a new 2022 model, which, to be fair, is a flawed formula. In most cases, new car buyers also have to contend with insane dealer markups. But since dealer markups vary significantly, it's impossible to calculate an average price. Jerry used the average cost of a used vehicle in Denver, which is the closest match to the national average.
"The chip shortage and other supply chain problems have pushed used car prices to an all-time high, with some of the most popular models selling for more than the list price of new vehicles. While the price increases may have slowed, they haven't stopped, and buyers of best-selling models are still paying a premium to drive away in a vehicle," stated Jerry's report.
We'll start with the most obvious. A used 2021 F-Series is worth $100 more than a new 2022 model, which you can't buy anymore. Ford sold 726,004 F-Series models in 2021, so there's not exactly a supply shortage, which explains the slight $100 difference. The same goes for a used Toyota Highlander, which is just $2,100 more than a new 2022 model.
Compared to new cars, a used Nissan Rogue is worth $3,100 more, a used Camry is $3,200 more expensive, a used Honda CR-V is $3,800 more, while the Civic is a shocking $5,300 more expensive.
Most shocking of all is a used Toyota RAV4, which retails for $5,900 more than a new model. That's roughly 22% of the MSRP of a brand-new entry-level RAV4.
This list makes complete sense if you look at any list of the best-selling vehicles in the USA. These are all popular cars that are in high demand. These brands also enjoy a high level of brand loyalty, which means customers are unlikely to go for a second or third option.
On the EV side, things are even more shocking. Pun not intended.
Unsurprisingly, the Ford Mustang Mach-E is on the list, as orders for 2022 models already stopped in April. The order books are now open for the 2023 model, and yet a used 2021 EV 'Stang retails for $5,200 more.
Tesla's used pricing seems to have settled down, and a used Model 3 is now just $5,200 more expensive than a new model.
Most surprising of all is the value of a lightly used Volkswagen ID.4, despite several well-documented glitches. You'll pay $6,300 more for a used model than for a brand-new car. That's roughly 17% of the MSRP of a new entry-level ID.4.
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