Used car prices have skyrocketed in recent months thanks to a number of factors, including the COVID-19 pandemic, the semiconductor chip shortage, and shrinking supply thanks in part to the fact that even rental car companies are having to buy up used vehicles to replenish their fleets. As a result, vehicle trade-in values have reached an all-time high and finding a good deal can be rather difficult, a fact that Kelley Blue Book’s latest analysis proves.
Year-over-year, KBB found that used car prices have risen a whopping 18 percent, creating a perfect opportunity for sellers. In terms of retained value, used vehicles are retaining 60-65 percent compared to just 55 percent a few months ago, which should have more than a few people thinking about selling the vehicle sitting in their garage.
“There has never been a much better time to sell or trade-in your car than right now during this strong seller’s market,” said Matt DeLorenzo, senior managing editor for Kelley Blue Book. “Dealerships are seeking more used-car inventory, and prices are reaching sky high. If you’re in a position to sell, it’s a great time to command top dollar for your old car. And if you’re trading in your vehicle to purchase a new one, the increased value of your used car will help take some of the sting out of the higher price you’re likely to pay when purchasing a car in these market conditions.”
Though there are many factors that have led to these sky-high values, KBB notes that supply is the most impactful. According to recent data, there are fewer than 2.34 million used vehicles available in the U.S. at the moment, which is a 530,000 unit decrease from just a year ago, as well as 430,000 less than 2019.