Used car prices are marching sharply higher this summer, largely because of the pandemic, and the models with the biggest price gains aren’t necessarily the most practical.
The average price for a used vehicle, between one to five years of age, rose 4.1% nationally and 1.9% in metro Denver between July and August, according to an analysis of nearly 1 million used car sales by iSeeCars.
Of the 10 models with the biggest increase nationally, all were luxury or sports cars, led by the Dodge Challenger, which experienced a 9% increase in the price that buyers were willing to pay in August versus July. The Land Rover Range Rover Sport wasn’t far behind with an 8.9% gain in just one month. The Volvo S60 came in third with an 8.6% gain.
Metro Denver buyers also had an affinity for the Dodge Challenger, which had the biggest gain at 10.7%. That worked out to $3,434 more paid in August than July for the muscle car. But on the whole they were more practical. In second place was the Honda CR-V, which had a 9% gain in sales price in metro Denver versus 3% nationally.
“It is interesting that the CR-V ranks so highly in Denver, as it is a practical small SUV. In this case, it shows that there is demand and likely not a high supply,” said Julie Blackley, the report’s author.
The Chevy Silverado 1500 grabbed the third spot in metro Denver with an 8.8% gain, and the RAM Pickup 1500 was fifth with an 8% gain. Nationally, the Nissan Titan and Ford 150 had the biggest monthly price appreciation among trucks in August.
It wouldn’t be Colorado without a Subaru somewhere in the vicinity. Prices for a used WRX popped 8.4% in just one month, which ranked fourth overall.
Manufacturing shutdowns during the early weeks of the pandemic have left many truck models in short supply and boosted demand. And while those might represent vanity purchases, they can also earn their keep as work trucks.
Besides manufacturing shortages, another reason often given for the big jump in used car prices this summer is that people who relied on transit or ridesharing services shifted to owning as a safer option. But Blackley said those buyers are more likely to drive a tougher bargain.
“People looking for cars in the $30,000 range aren’t as discerning in price as those looking for $10,000 range. We saw in the national data that many of the most popular cars didn’t have as significant price increases. And supply plays a role as well because there is a shortage of used cars in the market right now,” Blackley said.
Harder to explain is why so many buyers are willing to pay up for the privilege of owning a luxury or sports vehicle during the worst recession the world has seen since the 1930s. The pandemic could be triggering a carpe diem mindset, especially in purchases of the Challenger and the Ford Mustang, another popular sports car right now.