There’s a television commercial that’s been airing for decades in Chicago which begins with the tag line, “That old car is worth money.” While that ad is for a local auto graveyard, the same could be said for the larger used-vehicle market, where even models that may have formerly been written off as “beaters” are commanding hefty sums these days.
According to the valuation experts at Edmunds.com, the average pre-owned vehicle on a dealer’s lot that’s racked up between 100,000-109,999 miles rose in value by 31 percent over the past year, from $12,626 in June 2020 to $16,489 last month. That’s right, they actually increased in price by nearly a third. It seems everything we thought we knew about used car prices is now wrong. The notions that a vehicle is virtually guaranteed to depreciate over time, losing at least half their original value after five years, and that models with more than 100,000 miles on the odometer are a tough sell to all but the most cash-strapped motorists no longer apply.
With production of many new-vehicle lines being slowed or halted by the current microchip shortage, a lack of supply has sent more U.S. consumers (even rental companies) to the used-car market. In turn, the upsurge in demand along with a short supply of product to sell (fewer new models sold means fewer trade-ins winding up on used-vehicle lots) has caused prices to skyrocket literally across the board. In fact, as we documented in a recent post some pre-owned models are now commanding higher prices than their factory fresh counterparts. A “gently used” Kia Telluride SUV is going, on average, for over $3,500 more than a new one, according to the car-search website iSeeCars.com.
“It’s been a long-held belief among many car buyers and sellers that a vehicle’s value begins to decline dramatically once it crosses the 100,000-mile mark, but that’s proven to be wrong as vehicle technology and durability have greatly improved over the years,” explains Ivan Drury, Edmunds’ senior manager of insights. “We’re seeing seven- to eight-year-old vehicles with more than 100,000 miles commanding prices today that are more like the cost of five-year-old vehicles with 60,000-80,000 miles a year ago.”
It should come as no surprise that used vehicle costs accounted for more than a third of the 5.4 percent gain in the Consumer Price Index over the past year. It should also come as no surprise, given the genre’s overwhelming popularity, that used trucks commanded the highest year-over-year increases. Used Chevrolet Silverado 1500s now sell for an average 49 percent more than they did last summer, according to Edmunds.com, with pre-owned Ford F-150 models going for 43 percent more and the Ram 1500 at an average 42 percent increase.
Clearly this affords a rare opportunity to sell an older car, truck, or SUV that may be taking up space in the garage for a hefty sum, or to trade in your current ride and apply the extra money to a down payment on a new model. You might even want to sell the old vehicle and lease a new one at a favorable rate (Toyota Camrys are advertised for as little as $239 per month) to ride out the current market conditions and pocket the profit. “Even if you own an SUV or passenger vehicle that’s a bit long in the tooth, you shouldn’t be too quick to assume its value is dead,” Drury advises. “Chances are it’s worth a bit more — if not a lot more — than you think.”
You should certainly consider winnowing the family fleet if you own any of what Edmunds says are the 10 top-valued used vehicles driven for between 100,000-109,999 miles:
- Chevrolet Silverado 1500: $26,914; average age 6.6 years
- Ford Escape: $11,359; average age 7.1 years
- Ford F-150: $25,924; average age 7.2 years
- Honda Accord: $12,633; average age 8.4 years
- Honda Civic: $10,907; average age 8.0 years
- Honda CR-V: $13,829; average age 8.5 years
- Jeep Grand Cherokee: $17,700; average age 7.3 years
- Jeep Wrangler: $23,084; average age 8.6 years
- Ram 1500: $24,657; average age 6.5 years
- Toyota Camry: $12,057; average age 8.0 years