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Some used vehicles now cost more than original sticker price

Pandemic, global shortage of computer chips have pushed U.S. prices to record levels
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Vehicles for sale are seen under a protective tent at a Mazda dealership in Calgary, Thursday, July 14, 2016. THE CANADIAN PRESS/Jeff McIntosh

When it was new, the window sticker price on a typical 2019 Toyota Tacoma SR double cab pickup was just under $29,000. Two years later, dealers are paying almost $1,000 more than that to buy the same vehicle, even though it91裸聊视频檚 used.

Then they91裸聊视频檙e selling it to consumers for more than $33,000.

Welcome to the wacky world of U.S. car and truck sales, where the pandemic and a global shortage of computer chips have pushed prices to record levels.

In the past year, used vehicle prices on average have climbed 30%, according to Black Book, which tracks car and truck data. That91裸聊视频檚 created many crazy situations where high-demand vehicles are selling for more than they did when they were new, said Alex Yurchenko, the company91裸聊视频檚 senior vice president of data science.

91裸聊视频淭he market is very strange right now,91裸聊视频 said Yurchenko. 91裸聊视频淒ealers need the inventory, so they are paying lots of money for their vehicles on the wholesale market.91裸聊视频

Yurchenko has found 73 models of 1- to 3-year-old vehicles being sold at auctions (where dealers buy their vehicles) for prices above their original sticker, which is called the manufacturer91裸聊视频檚 suggested retail price.

Used vehicle price increases accounted for one-third of the large rise in inflation last month, according to the Labor Department. Prices shot up a record 10% in April and another 7.3% in May, as inflation spiked 5%, the biggest 12-month increase since 2008. The average used vehicle cost $26,457 this month, according to Edmunds.com.

Many of the models Yurchenko found were high-priced trucks and SUVs or highly sought-after loaded-out vehicles, including the high-performance Ford F-150 Raptor pickup, the 2019 Jeep Wrangler Unlimited Rubicon SUV and the boxy Mercedes G-Class AMG63 high performance SUV.

But the two-wheel-drive Tacoma SR is the lowest-priced model of Toyota91裸聊视频檚 top-selling small pickup. To be sure, higher end versions of the Tacoma also were on the list, but even more mainstream vehicles are selling for more than their original prices. For instance, the 2020 Kia Telluride and Hyundai Palisade made the list even though both are considered good values compared with more expensive SUVs with three rows of seats.

Yurchenko says the crazy prices are moving further into more ordinary vehicles. 91裸聊视频淏efore we get through this, prices for many mainstream vehicles will get closer to their manufacturer91裸聊视频檚 suggested retail price,91裸聊视频 he said.

It all started in April and May of last year, when U.S. automakers were forced to close factories for eight weeks to help stop the novel coronavirus from spreading. That cut production, limiting inventory even as demand remained surprisingly strong.

The factories came back faster than expected, and in the meantime, computer chip makers had switched to manufacturing semiconductors for phones, laptops, gaming systems and other consumer electronics. That created a shortage of automotive chips, which is forcing car companies to temporarily close factories, leaving some dealers with few new vehicles.

The lack of new vehicles and higher prices have sent more people into the used vehicle market, so demand is high there, too. Plus, rental car companies, normally a source of late-model used vehicles, are keeping their cars longer because they can91裸聊视频檛 get new ones, Yurchenko said.

At present, consumers who have to replace a vehicle don91裸聊视频檛 have much choice. 91裸聊视频淯nfortunately, if you need a vehicle, you91裸聊视频檒l need to pay the price,91裸聊视频 Yurchenko said.

But there are signs that price increases are starting to slow. Used car prices rose 0.75% last week, the lowest weekly gain in 17 weeks. Trucks and SUV prices grew 0.68%, the lowest weekly gain in 15 weeks, according to Black Book.

Karl Jensvold, owner of PricedRite Auto Sales, a used vehicle dealer in Lincoln, Nebraska, said he91裸聊视频檚 seeing wholesale prices leveling off, but he doesn91裸聊视频檛 expect them to drop anytime soon. 91裸聊视频淚 think the normal used car market has reset to a different price point,91裸聊视频 he said. 91裸聊视频淚 don91裸聊视频檛 think we91裸聊视频檒l see the prices (from) before COVID for a while.91裸聊视频

Yurchenko said at some point prices will have to go back to normal and used vehicles will depreciate once again. The timing depends on how long it takes to get more computer chips so automakers can resume normal production, he said. 91裸聊视频淥nce the new inventory levels start increasing, that91裸聊视频檚 where the pressure on the used market will be relieved,91裸聊视频 he said.

91裸聊视频擳om Krisher, The Associated Press





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