Study: Chip shortages/pandemic causes used car prices to jump 31% in Motor City
(The Center Square) – Used car prices keep climbing in Detroit.
According to iSeeCars’ newest study, used car prices in June increased by 31.4% or $7,179, in Detroit year over year as a result of the microchip shortage and the COVID-19 pandemic.
Nationally, used car prices have increased 32.7%, or $7,583 compared to last year. This comes after a 26.4% year-over-year increase in May and a 16.8% year-over-year increase in April, the study found.
Some vehicles have increased more than average, increasing the cost to buy but offering lucrative trade-in opportunities. Other cars have lower-than-average increases, making them smart buys for consumers who need a car now.
iSeeCars.com analyzed over 1.1 million used car sales of model years between 2016- 20 in June 2021, and over 800,000 used car sales of model years 2015-19 in June 2020. Analysts compared average listing prices of each car model between the two times. Findings included:
Used car prices in June increased an average 32.7%, or $7,583, over the past 12 months, compared to most years when year-over-year prices remain constantUsed cars increased as much as 48.1%, with the lowest price change of 11.4%Sports cars and pickup trucks had the highest price increasesSmall SUVs, hatchbacks, and minivans only saw minor price bumps
Used car prices continued to rise in June during the global microchip shortage as restricted new car supply has led to fewer people trading in their used cars. This combination of diminished supply and increased demand has spiked used car prices.
“The microchip shortage has brought historic used car price increases, so much so that some lightly used cars are more expensive than new models,” iSeeCars Executive Analyst Karl Brauer said in a statement. “While used car prices are expected to remain elevated for the foreseeable future, we are waiting to see if prices are going to keep rising or if they will start to decline towards pre-microchip shortage levels.”
The analysis also found vehicles with lower-than-average price increases.
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