(iSeeCars) Used car prices rose slightly in November as the microchip shortage continues to impact the automotive market.
According to iSeeCars.com’s latest analysis of over 1.9 million used car sales in November, used car prices increased 27.9 percent, or $6,939, compared to the same period the previous year. This comes after a 24.9 percent increase in October.
“Used car prices had drifted down, slightly, since they peaked in June, but they are back on the rise again, with the average used vehicle priced nearly over $7,000 above where it was last November,” said Karl Brauer, iSeeCars’ Executive Analyst. “With microchip shortage-related plant shutdowns persisting throughout the year, automakers have not kept pace with pent-up demand originating from pandemic-related plant closures, and lingering supply constraints that are expected to continue well into 2022.”
Although the average used car has significantly increased in price, iSeeCars’s analysis also found some vehicles have lower-than-average increases, making them smarter buys for consumers in the market for a used car. “While these used models are still more expensive than last year, they haven’t been as drastically impacted by price hikes,” said Brauer.
Why Are Used Cars So Expensive? Chip Shortage Explained
Used cars are at record highs because demand is far exceeding supply. Microchip suppliers paused production in the early days of the COVID-19 pandemic to protect workers, and the economic slowdown caused automakers to order fewer computer chips. When the economy began to recover, there was an increased demand for personal electronic devices and microchip factories became overwhelmed. Automakers were forced to stop new vehicle production due to a supply chain shortage of microchips and semiconductors. As a result of the production disruptions, car buyers were forced to buy used cars due to a scarcity of new cars. The increased demand for used cars coupled with reduced supply at dealerships as fewer people were trading in their old cars to buy new ones, has led to a shortage of used cars. This shortage has led to record high prices for used cars.
And it’s not just used cars that are experiencing price hikes. New car prices have risen too with the average brand new car costing above sticker price. Car companies have also slashed incentives due to the shortage of new cars, which has elevated the average price paid for new cars.
Top 10 Used Cars With the Greatest Price Increases
The top ten vehicles with the greatest price increases have price changes from 1.4 to 2.3 times the average vehicle’s price increase and are primarily small, relatively affordable cars. “Small cars have become the only affordable used car option for a growing segment of the population, and their price increases reflect the high demand these otherwise low-demand vehicles have experienced in recent months,” said Brauer.
|Top 10 Cars with the Greatest Price Increases (YoY) – iSeeCars November 2021 Study|
|Rank||Used Vehicle||Average Used Car Price (November 2021)||$ Price Change from November 2020||% Price Change from November 2020|
|6||MINI Hardtop 2 Door||$24,788||$7,136||40.4%|
|Average Across All Cars||$31,848||$6,939||27.9%|
The vehicle with the largest price increase is the Nissan LEAF, which has risen in price by 64 percent since November 2020. “While used car prices for all electric vehicles have increased in recent months, the dramatic increase for used Nissan LEAF prices could be attributed to the 2018 model, which featured a significant bump in EV range, performance improvements, and an exterior facelift, and which only just entered the market this year in substantial numbers,” said Brauer.
The vehicle with the second greatest price increase is the Mitsubishi Mirage subcompact car, which saw a price increase of 52.3 percent over November 2020. It’s joined by six other small, gasoline cars: the subcompact Chevrolet Spark, the compact Kia Forte, the subcompact Kia Rio, the subcompact MINI Hardtop 2 Door, the compact Toyota Corolla, and the Kia Soul subcompact SUV. “The Chevrolet Spark, the Kia Rio, and the Mitsubishi Mirage are among the lowest-cost cars on the market, while the Kia Forte and Kia Soul are among the lowest-priced options in their respective vehicle classes,” said Brauer. “These vehicles, along with the MINI Hardtop that appeals to practical buyers who want something more refined, and the always-popular Toyota Corolla, are attainable for new drivers and those looking for affordable transportation, even with their large increase in price over the past year.”
The Toyota Prius ranks seventh. The Toyota Prius has surged in demand as fuel prices have risen more than 25 percent over the past 12 months,” said Brauer. “Even with its used vehicle price increase, the Prius still costs less than the average used vehicle, making it a popular choice for practical car shoppers.”
The Lincoln Navigator luxury full-size SUV rounds out the list. “The Lincoln Navigator was fully redesigned in 2018, which was its first full redesign in over a decade,” said Brauer. “With this redesigned model coming off-lease for the first time in 2021, and as the luxury full-size SUV market has boomed, buyers are clearly willing to pay more for this in-demand vehicle than its previous version.”
Top 10 Used Cars With the Smallest Price Changes
The top ten vehicles with the smallest price differences have increased 1.9 to 3 times less than the average vehicle and are mainly luxury cars.
|Top 10 Cars with the Smallest Price Increases (YoY) – iSeeCars November 2021 Study|
|Rank||Used Vehicle||Average Used Car Price (August 2021)||$ Price Change from August 2020||% Price Change from August 2020|
|2||Nissan Titan XD||$40,611||$3,762||10.2%|
|5||Lexus IS 300||$33,041||$3,870||13.3%|
|10||BMW 4 Series||$33,220||$4,206||14.5%|
|Average Across All Cars||$31,848||$6,939||27.9%|
The list is dominated by five luxury SUVs across all sizes, including the first-ranked midsize Volvo XC90, the third-ranked compact Porsche Macan, the fourth-ranked full-size INFINITI QX80, the seventh-ranked midsize Porsche Cayenne, and the eighth-ranked compact Mercedes-Benz GLC.
“The Mercedes-Benz GLC, the Porsche Macan, and the Porsche Cayenne are among the highest-rated and top-performing vehicles in their classes, but they are also among the most expensive, which could explain why their price increases are lower than competitive models,” said Brauer. “The Volvo XC90 and the INFINITI QX80 are also quality vehicles with advanced technology, but their aging designs prevent them from standing out in their respective segments.”
Three pickup trucks make the list including the second-ranked Nissan Titan XD, the sixth-ranked Chevrolet Colorado, and the ninth-ranked Nissan Titan. “The Nissan Titan and its XD heavy-duty-ish model are the slowest-selling trucks in the full-size segment, reflecting low demand in the used car marketplace,” said Brauer. “The compact Chevrolet Colorado is a value-oriented pickup with one of the lowest prices in its class, and it has seen increased competition with new entrants to the segment.”
Two compact luxury sedans also make the list: the Lexus IS 300 and the BMW 4 Series. “The Lexus IS 300 was refreshed for 2021 to include exterior styling and technology updates, while the BMW 4 Series was completely redesigned,” said Brauer. “The updates, along with the declining popularity of sedans in general, could help explain why used versions of these cars aren’t in high demand.”
Used Car Price Increases by City
iSeeCars looked at the top 50 most populous metro areas to see which metro areas had the smallest and largest increase in pre-owned car prices in November 2021 compared to November 2020.
|Average Used Car Price Increase in November by City|
|Rank||City||% Price Change from November 2020||$ Price Change from November 2020|
|1||Orlando-Daytona Beach, FL||33.4%||$7,326|
|2||San Francisco-Oakland-San Jose, CA||33.3%||$8,358|
|3||West Palm Beach-Ft. Pierce, FL||33.1%||$7,707|
|5||Norfolk-Portsmouth-Newport News, VA||31.8%||$7,295|
|6||Hartford & New Haven, CT||31.2%||$7,027|
|7||New York, NY||31.1%||$7,696|
|8||Raleigh-Durham (Fayetteville), NC||31.1%||$7,482|
|10||Las Vegas, NV||30.6%||$7,141|
|11||Albuquerque-Santa Fe, NM||30.3%||$7,772|
|13||New Orleans, LA||29.8%||$6,970|
|14||Los Angeles, CA||29.7%||$7,301|
|19||Salt Lake City, UT||28.5%||$7,059|
|20||San Diego, CA||28.5%||$6,604|
|23||Oklahoma City, OK||28.2%||$7,164|
|28||Washington, DC (Hagerstown, MD)||27.6%||$6,698|
|30||Grand Rapids-Kalamazoo, MI||27.0%||$6,604|
|33||Boston, MA-Manchester, NH||26.4%||$6,636|
|36||Tampa-St Petersburg (Sarasota), FL||26.2%||$6,253|
|39||Cleveland-Akron (Canton), OH||25.2%||$5,668|
|40||Minneapolis-St. Paul, MN||24.8%||$6,318|
|41||Greensboro-Winston Salem, NC||24.6%||$5,973|
|43||Miami-Ft. Lauderdale, FL||23.9%||$5,767|
|45||Kansas City, MO||23.1%||$5,760|
|47||St. Louis, MO||21.5%||$5,643|
|49||Dallas-Ft. Worth, TX||21.0%||$5,394|
|50||San Antonio, TX||8.1%||$1,966|
San Antonio had the smallest price increase at 8.1 percent, while Orlando-Daytona had the greatest used car price increase at 33.4 percent.
“The current state of the used car market presents a selling or trade-in opportunity for consumers who may have one of the vehicles with the greatest price hikes,” said Brauer. “While consumers were previously advised to wait to purchase a used car if they were able to do so, the microchip shortage is expected to persist well into 2022. The only way for American consumers to avoid significantly higher prices for the foreseeable future is to purchase a used vehicle that isn’t in high demand.”
iSeeCars.com analyzed over 1.9 million 1-5-year-old used car sales in November 2020 and 2021. The average listing prices of each car model were compared between the two time periods, and the differences were expressed as both a percentage difference from the 2020 price as well as a dollar difference. Heavy-duty vehicles, low-volume vehicles, vehicles discontinued as of the 2021 model year, and vehicles with fewer than 4 of the 5 model years for each period were excluded from further analysis.
iSeeCars.com is a car search engine that helps shoppers find the best car deals by providing key insights and valuable resources, like the iSeeCars free VIN check reports and Best Cars rankings. iSeeCars.com has saved users over $309 million so far by applying big data analytics powered by over 25 billion (and growing) data points and using proprietary algorithms to objectively analyze, score and rank millions of new cars and used cars.