Replacing a car or truck continues to be more expensive. While there is a shortage of new vehicles because of a lack of computer chips, demand for used cars and trucks continues to push those prices higher.
A report from iSeeCars.com shows that used vehicle prices in February increased by an average of 35%, or $9,080, year-over-year. The only good news is that the increase is slightly less than January’s
With gas prices at record highs, it may be no surprise that the vehicles increasing the most in price were economy and fuel-efficient cars. The average price of a hybrid jumped by nearly 47%, while electric vehicles went for 43% more.
“After coming down slightly in February, used car prices remain elevated due to lingering supply constraints, and they are expected to rise again due to geopolitical factors as Russia is a key supplier of materials used to make car parts and microchips,” said iSeeCars executive analyst Karl Brauer. “We are also seeing a significant increase in demand for used hybrid and electric vehicles as a result of high gas prices.”
Vehicles that increased the most
Because not all vehicles are increasing in price at the same rate, car shoppers need to do their homework before heading to a used car lot. According to the iSeeCars research, six models – the Hyundai Sonata Hybrid, Chevrolet Spark, Nissan Leaf, Mercedes Benz G Class, Kia Forte, and Kia Rio – all increased in price by more than 50% in the last 12 months.
Unfortunately for car shoppers, most of the cars that increased in price the least were already expensive to start with. According to the report, the Maserati Levante, Porsche Macan, and Jaguar F-Pace registered the smallest price increases since February 2021.
Used cars have become so expensive due to demand outstripping supply. With fewer new cars being produced due to the chip shortage, buyers are bidding up prices.
Whatever the market will bear
Unlike new cars that have a manufacturer’s suggested retail price (MSRP), also known as the “sticker price,” used car dealers are free to price vehicles at whatever the market will bear.
If there is one small silver lining to all of this, consumers who don’t have to purchase a new vehicle in the immediate future are slightly protected from the inflation that is roaring through the economy.
Government economists at the Bureau of Labor Statistics note that used car prices have contributed almost nothing to the inflation rate in the last 20 years. In the last 12 months, they attribute at least 1% of the nation’s inflation rate to the price of used vehicles.