Your Chevy Corvette Could Be Worth Much More Than You Paid
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How would you react if someone told you they would buy your old car for more than you bought it for? This might come as a surprise, but it is actually true right now.
And if you bought a new car during the pandemic, you can probably sell it for several thousand bucks more. For some cars, you might only be able to recoup what you bought them for. However, that is still a great deal, considering that the value of a car generally starts depreciating as soon as it leaves the dealership.
A new 2020 Chevrolet Corvette is now worth $26,000 more
New and used cars are in high demand right now
Although it is an extreme case, a CNN data analysis reveals that the value of the 2020 Chevrolet Corvette has risen by up to $26,000. The data analysis highlighted that a 2020 Corvette bought and used since last summer goes for $107,000, while it was worth $81,000 when brand new. This is just one of the cases showing that the used car market is currently booming.
The same report reveals that the price of a Jeep Wrangler bought last year has risen by $3,200. A Honda Civic bought during the same period is now worth $1,700 more, while the price of a Subaru Ascent has risen by about $1,600.
What is causing the price anomaly for new and used cars?
Normally, selling a used car returns about 80% to 85% of its original value. This is why it is a surprise to many that the average price of one-year-old cars now returns up to 95% of their sale price when they were brand new.
As CNN reports, some experts attribute this anomaly to the fact that there is a massive demand for SUVs and cars while the supply is limited. This is because there has also been a huge disruption in the global supply of crucial computer chips.
Last year, the Coronavirus pandemic caused numerous people to reassess their priorities. This meant that car sales plummeted as lockdowns became commonplace in numerous cities and many individuals grew more uncertain about their financial future.
Car dealers suddenly had high inventories, and many of them were willing to bargain. As a result, car buyers benefited from low prices.
Now, with the pandemic under some level of control and most people returning to their routine way of life, the situation is reversed. Customers have returned to the car market and found supply chain disruptions and delays that have led to a shortage of new models.
This makes the car that you bought just last year look very, very appealing. You are in a particularly ideal bargaining position if you have a good car to sell, especially if you’ve only used it for several months.
The markups don’t really apply for trade-ins or private sales
Even though the prices of one-year-old used cars have risen, don’t expect to get the same deals during trade-ins or when selling your car by yourself. The data that CNN analyzed at Edmunds reflects the value of the used cars when sold by a dealer. You will get much less than what they would when you sell the car to them or sell directly to a new owner.
For the Corvette, you would only $10,000 above its brand-new car price during a trade-in deal. Some other cars will even net a lesser amount than their original value when selling to used car dealers or via trade-in.
For the Jeep Wrangler, selling back to a car dealer will result in a price that is $2,300 less than the original value. However, the amount is still pretty decent, considering that a car used for a full year loses up to 25% of its original value.
Pickup trucks are some of the cars that have been most affected by the price anomaly. With more people camping, the demand for heavy-duty trucks that can tow new RVs is high. For instance, you can even trade in a Ram 2500 for up to $5,200 more than its original price.
Experts suggest that the anomaly may carry on for a while. This is because it may take some time before car production fully resumes, even if the computer chip shortage wanes.