Fresno, Visalia top the U.S. in used-car price increases. How fast are they rising?
The prices commanded by used cars rose faster in the Fresno-Visalia market between August 2020 and August 2021 than any other U.S. large metropolitan area, according to a new car-price report.
Used-car prices continue to climb nationwide as a global shortage of microchips makes new vehicles not only more expensive, but harder to find. That’s forcing some buyers to settle for a used vehicle, but those aren’t the bargain that they used to be.
Nationally, the average price of a used car dipped slightly between July and August, according to the analysis produced by iSeeCars.com, but overall, prices were more than 26% higher last month – an average of almost $6,500 – than they were a year earlier.
Together, the Fresno-Visalia market blew that national average out of the water. The iSeeCars analysis indicated that for used cars that are between one and five years old, the average price climbed by almost 37%, or more than $7,500, compared to August 2020. That’s the largest percentage increase, year-over-year, across the 50 largest metro markets in the country.
“Used car prices have been coming down slightly since they peaked in June, but they are still significantly higher than they were last year, with the average used vehicle priced over $6,000 above where it was last August,” iSeeCars.com executive analyst Karl Brauer said.
“As the microchip shortage-related plant shutdowns continue, and with the aftermath of Hurricane Ida expected to further elevate prices, there appears to be no relief in sight for used car shoppers.”
In a normal auto sales environment, depreciation occurs quickly and greatly diminishes the value of a new car. The chip shortage is altering that calculus through market forces of supply and demand. Now, in some instances, owners of used cars are able to sell or trade in their vehicles for more than they originally paid.
Along Blackstone Avenue in north Fresno — a hotbed of auto dealerships — some dealers are promoting their willingness to buy used cars even if the customer doesn’t buy a new vehicle from their lot.
“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,” iSeeCars’ Brauer said.
“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 for at least a year longer than originally anticipated.
“The only way to avoid severe price hikes for the foreseeable future is to purchase a used vehicle that isn’t in very high demand,” Brauer added.
In the Fresno market, the five used vehicles with the greatest average year-over-year increase last month included two U.S. makes and three imports – two from Korea and one from Japan.
Topping the list was the Ram 1500 pickup, with an average increase since last August of 29% or $9,144, according to the analysis. It was followed by the Hyundai Sonata sedan, the Dodge Charger, the Kia Soul and the Nissan Sentra.
