Old Used Car Prices Are Spiking Because New Cars Are Too Expensive

[AVANTI R5]

Old Used Car Prices Are Spiking Because New Cars Are Too Expensive

News flash: Car prices are insane. The average new car price is close to $50,000, sending buyers into the used market. Unsurprisingly, that's driving the prices of used cars way up. And it's not just the lightly used segment that's skyrocketing. Old used cars are supremely expensive, too.

According to a recent iSeeCars study, the average price of a 10-year-old car is now $12,194. in 2014 it was $7,583—a difference of 60 percent. The increase corresponds with a higher market share for old used cars, which currently sits at 22.7 percent. In short, more people than ever are buying older cars. And they're paying a premium to get them.

As you can probably guess, the changes began with the COVID-19 pandemic. Market share at the start of 2020 was 15.1 percent, and the average selling price was $9,135. By 2022, the share jumped to 19.2 percent and the price reached $12,549.

“The trend in vehicle prices represents an inescapable tidal wave,” said Karl Brauer, executive analyst at iSeeCars. “When you have new and lightly used car prices spiking, as they have over the past four years, there’s no stopping the wave’s impact on older cars, even for cars produced more than a decade ago.”
Here's where things get interesting.

There's no denying the popularity of SUVs, but the study—which analyzed 169 million used cars sold over the last 10 years—found that sedans, hatchbacks, and wagons were exceedingly popular. Leading the pack was the Hyundai Sonata, posting a whopping 484.3 percent increase in market share among cars 10 years old or older. The Subaru Legacy, Impreza, and Impreza wagon are also in the top five along with the Mercedes-Benz C-Class. Contrary to what some automakers claim, it seems plenty of buyers still want cars that aren't giant SUVs.

"While not as popular with new car buyers, older sedans, wagons, and hatchbacks are gaining market share in the used car market," said Brauer. “Their lower cost, lighter use, and higher fuel efficiency make them an excellent alternative to larger trucks and SUVs that cost more up front and more to fuel and insure."

[VarmintCong]

It’s a myth that carmakers build what we want. They build and order what they want to sell us, then blame low sales of stuff they don’t want to sell.

They don’t control the used car market so you see what people really want.

[dwf137]

Originally Posted by VarmintCong

It's a myth that carmakers build what we want. They build and order what they want to sell us, then blame low sales of stuff they don't want to sell.

I think it's a little more nuanced than that, but in any given moment, absolutely.

Most are going to base what they make on historic trends with some amount of forecasting... IE what's available right now is where the market was heading 2-3 years ago. Most are not nimble enough to respond to fickle consumers, so they just ram their poor choices down our throats. It's why they're all getting caught with their pants down right now.

This is also not unique to the car industry, it's happening in many industries. The mountain bike manufacturers are all struggling because they ramped up high-end bike production due to covid sales, but now demand has fallen back and they're left discounting stuff to move it. Used bikes are all over the second hand marketplace and at steep discounts because everyone thought they wanted a new hobby.

[SoDealer]

Originally Posted by dwf137

I think it's a little more nuanced than that, but in any given moment, absolutely.

Most are going to base what they make on historic trends with some amount of forecasting... IE what's available right now is where the market was heading 2-3 years ago. Most are not nimble enough to respond to fickle consumers, so they just ram their poor choices down our throats. It's why they're all getting caught with their pants down right now.

This is also not unique to the car industry, it's happening in many industries. The mountain bike manufacturers are all struggling because they ramped up high-end bike production due to covid sales, but now demand has fallen back and they're left discounting stuff to move it. Used bikes are all over the second hand marketplace and at steep discounts because everyone thought they wanted a new hobby.

At a vehicle launch for a new model, sure. It doesn't take a manufacturer long to adjust the mix of what's available for production. Once a model has been launched, if a manufacturer realizes they've missed the mark on production mix, it would typically take 3-6 months before inventory reflects a change.

Reluctance to curb production (manufacturers make money when they sell cars to the dealers, not to the customers) or shift mix to less expensive trims (more expensive typically means more profit) is another topic altogether.

Also, a quick glance at the results of the actual study show that the methodology used doesn't align with everything the clickbait article says.

https://www.iseecars.com/vehicle-age-study#v=2024

[VarmintCong]

Originally Posted by dwf137

I think it's a little more nuanced than that, but in any given moment, absolutely.

Most are going to base what they make on historic trends with some amount of forecasting... IE what's available right now is where the market was heading 2-3 years ago. Most are not nimble enough to respond to fickle consumers, so they just ram their poor choices down our throats. It's why they're all getting caught with their pants down right now.

This is also not unique to the car industry, it's happening in many industries. The mountain bike manufacturers are all struggling because they ramped up high-end bike production due to covid sales, but now demand has fallen back and they're left discounting stuff to move it. Used bikes are all over the second hand marketplace and at steep discounts because everyone thought they wanted a new hobby.

Thanks for the heads up, we need to buy 2 maybe even 4 mountain bikes next summer when we move back to the US.

I’ve been seeing every industry move to focusing on only the wealthy since the wealth gap exploded, hopefully that is reversing.

[Genericuser1]

Is it they want cars that aren't giant SUV's or that is what they can afford?

One of the reasons I'm looking to get a Kei truck is you can import them with all fees for under $6k for a good one and have 40k miles. Check out any 20-year-old Tacoma or similar and its 200k miles and they want $12k.

[Hannyta76]

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[White out]

According to a recent iSeeCars study, the average price of a 10-year-old car is now $12,194. in 2014 it was $7,583-a difference of 60 percent. The increase corresponds with a higher market share for old used cars, which currently sits at 22.7 percent. In short, more people than ever are buying older cars. And they're paying a premium to get them.

Some quick math that seems to have been left out.

$7,583 in 2014 is the equivalent to $10,075.18 today.

The cost of a new vehicle over the span of 10 years increases.

Quick search from Edmunds.com:
In September 2004, the sales-weighted average new vehicle sticker price was $30,104.
The average transaction price for new cars in 2014 was $32,386.

So the ballpark value of new cars between those years, combined with inflation is the difference of this article.

As you can probably guess, the changes began with the COVID-19 pandemic. Market share at the start of 2020 was 15.1 percent, and the average selling price was $9,135. By 2022, the share jumped to 19.2 percent and the price reached $12,549.

The chip shortage played a big part in the low new sales to high used sales volume and increase in used car pricing. But additionally, there are far more used vehicles because of flips of new vehicles for significant gains, both of which really were not nearly as common as the period of 2020-today and so common that manufacturers are fighting to stop it. So this aspect makes sense.

[samb]

Sheesh tell me about it. I got curious about E90/E92 M3s with their glorious V8s, until I started shopping