PHOENIX (3 On Your Side) - The cost of used cars is going up more in the Phoenix area than other parts of the country, according to a new iSeeCars study.
"The forces that are causing used car prices to go up are probably going to be with us for a while, probably through at least the calendar year and into 2022," said Karl Brauer, an analyst for the company.
Multiple factors are causing the jump in used car prices, including shortages of chips and other materials, which are slowing down the production of new vehicles. With less supply in the new car market, many car shoppers are turning to the used car market. Rental companies and other businesses with big fleets are also trying to build up their inventory after selling off large portions of their fleets at the beginning of the pandemic, creating more competition for used vehicles. According to iSeeCars' latest study, the result is a 16.8% spike in used car costs nationwide, compared to the same time last year. In the Phoenix area, used vehicle prices surged a whopping 20.3%.
The Chevrolet Corvette topped the list of used car price increases, jumping 33.9%. The Mercedes-Benz G-Class, Ram 1500, and GMC Sierra 1500 rounded out the top four, which are all up about 30%. SUVs and minivans, in general, went up less in price than convertibles and trucks, the study revealed. According to the study, Tesla's Model S is the only used vehicle that decreased in price year over year.
"If you've got a car and can get rid of it, and maybe get one that's not as popular or hasn't gone up as much in the past year, you can at least make up some ground here," Brauer said. "But if you can just stick with what you've got and not have to interact with the purchase at all, new or used, for another six to twelve months, you'll probably be better off in terms of what you can find and what you can pay."
If you aren't able to hold off on a car purchase, the key to getting a better deal is flexibility.
"If you have to have a very specific year make, model and color, you're kind of at the mercy of the market, but if you have a few models and you're willing to expand your geographical search - maybe most people don't go more than 10 to 30 miles to buy a car, but you're willing to cross a state line and go 100 miles or 150 miles, that's still pretty inexpensive to spend a couple hours, have someone drive you out and back and pay for the gas if you're saving hundreds, or even a thousand dollars on a car purchase," Brauer said.
Another way to get the most bang for your buck is to sell your old car on your own versus doing a trade-in, but Brauer says it's important to remember that means extra work, including advertising the car, making sure the transaction with the person you're selling to is legitimate, and completing all of the necessary paperwork.