Sticker Shock: These Used Vehicles Sell for More Than New List Prices

Ben Guess
Updated on Aug 29, 2022 · 5 min read

Key Insights:

  • Despite used-car prices cooling a bit, lightly used versions of seven of the 10 best-selling vehicles in America are still worth more than the sticker price on comparable new 2022 models. Sure, that’s down from nine of 10 in June, indicating the worst of the red-hot price increases for used vehicles may be behind us, but it hardly marks a return to normal.
  • Strong demand for electric vehicles (EVs) at a time when gasoline prices had hit record highs helped turn some of the EV market upside down as well. Three of the top five best-selling EVs from 2021 are now worth more lightly used than the sticker price on comparable new 2022 models.
  • The pace of annual price increases for used cars has slowed this year. The Bureau of Labor Statistics’ used-car price gauge rose 6.6% in July from the previous year, down from a 41% jump recorded in February. Prices actually fell from the previous month in both March and April, but have since risen for three consecutive months, according to BLS data.

Seven of 10 Best-Selling Vehicles Are Cheaper New Than Used

The value of a new car previously fell by thousands of dollars as soon as you drove it off the dealer’s lot. The pandemic has changed that for many models. Our study compared market values for 2021 models with fewer than 20,000 miles to the Manufacturer’s Suggested Retail Price (MSRP) for comparable new 2022 models.
Our analysis found that, among the 10 best-selling vehicles in the U.S., the following lightly used 2021 models are worth more than the sticker prices on new 2022 models:
  • Toyota RAV4 ($5900 more)
  • Honda Civic ($5300 more)
  • Honda CR-V ($3800 more)
  • Toyota Camry ($3200 more)
  • Nissan Rogue ($3100 more)
  • Toyota Highlander ($2100 more)
  • Ford F-Series ($100 more)
We also found that lightly used 2021 models of the following EVs were worth more than the sticker price on comparable new 2022 models.  
  • Volkswagen ID.4 ($6,300 more)
  • Tesla Model 3 ($5,200 more)
  • Ford Mustang Mach-E ($5,200 more)
Because of the chip shortage and other disruptions, many car manufacturers, including Toyota and Honda, have cut production despite strong demand, resulting in fewer new cars on dealer lots and longer wait times for delivery. This has driven up the prices of both new and used cars. According to Edmunds, 82% of people who bought a new car in January 2022 paid more than the MSRP, compared to just 2.8% a year earlier. Others turned to the used car market — and many are paying more than the list price of a new one.
Some drivers may live with the consequences for years. According to the Jerry2022 State of the American Driver Report, 25% of American drivers had planned to shop for a car this year. Without an adequate supply, and with prices increasing nationwide as a result, some may change their minds. Still, theNew York Times reports that other car buyers, unable to afford their first choice of model, are purchasing their second or even third choice.

South Carolina, New York See Biggest Price Jumps

South Carolina (17%), New York (16%) and New Jersey (15%) saw the biggest increases in used car prices from a year earlier in July. They were among 21 states that saw prices rise by at least 10%. 
Still, the year-on-year price increases are slowing. In April, the state with the smallest 12-month rise was Wyoming, which had seen used car prices rise 15% from the same month a year earlier. Now the majority of states are seeing single-digit increases, with used-car prices in Oklahoma rising only 0.8% from a year earlier.

Conclusion

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. 
To ensure that you don’t pay exorbitant prices for a used car, make sure to start shopping for a new car well ahead of when you would want to drive it off the lot. Starting weeks or months in advance can keep you from paying too much and can ensure you get the car you want on time. Alternatively, consider your needs — if you have a second or third choice that would make you nearly as happy, that compromise could save you time and money.

Methodology

We analyzed national and state-specific prices, both new and used, for the 10 best-selling vehicles in the U.S. from the past 12 months. Due to regional pricing variations, there was no established national average price for those used models. Jerry researched average prices for used models in the largest city by population in each state, as well as an overall national average price of used cars (not model specific). 
To arrive at a national average price for specific used models, we chose the average price for that model in an area of Denver, the city whose overall average used car price most closely matched the overall national average.
To avoid price disparities due to trim levels, we compared Kelley Blue Book private party values for 2021 base models in excellent condition and with 18,000 miles with MSRPs for the same base vehicle models in the 2022 model year.
(Note: This is the third update of this study, which was first published March 21, 2022.)

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