Has the automotive market lost its mind post covid?
Valerie Raskovic
Jul 18, 2023
As automotive enthusiasts the guys at VinCheckUp have been closely following the new trends and changes in the automotive market. We keep track of vehicle listings on all popular websites such as bringatrailer.com, autotrader.com, craigslist.org, cars.com and even Facebook marketplace. Needless to say, we are not loving the changes in the automotive landscape. Although, we have seen a slight decline from general resale and retail, vehicle pricing is still up from years earlier.
It is so ridiculous that vehicles that are traditionally below market generally ranging around $5000 in 2019 started fetching around 50% higher in 2021/2022 and about 38% higher 2023. Meaning, if you sold a car for $5,000 in 2019 you could have sold the exact same vehicle for up to $2500 more in 2022.
We have noticed this trend when comparing prices for a handful of low-cost pre-owned vehicles by year, make and model as well as mileage across all popular sale platforms. Now same thing does not apply to vehicles over $10,000. Yes, vehicles over $10,000 have increased in price but by percentage not as drastically as the cars sub $5000. Granted there are some exceptions due to the electronic chip crises and supply chain interruptions that occurred during covid. Some higher end vehicles were fetching upwards of $100,000 in premium over sticker. One example of this is the Mercedes Benz G55. Even though the prices of these cars have started plummeting towards the beginning of the year they are still pricier than they were pre-covid.
Now you can try to explain this phenomenon by simply saying that the value of used vehicles can fluctuate based on supply and demand dynamics. Afterall, the COVID-19 pandemic did a number on the automotive industry as it experienced significant disruptions, including production shutdowns. But the guys at VinCheckUp think it is part of something even bigger. A change in the economic landscape and various market trends is changing the automotive market in the US at brake neck speed.
Just the fact that the dollar does not have the same buying power as it did just a few years ago is a testament of the rapid change we have undergone. We have to accept the fact nothing will ever cost the same. However, inflation is just part of the problem. Due to the governments push for full electrification a lot of vehicle manufacturers started abandoning more traditional offers creating increased demand for certain gas vehicles in the process.
Some vehicle manufacturers such as Ford completely stopped making sedans, driving customers to the used market. Just compare the price of a brand-new Ford Focus ST in 2018 which averaged around $25,170 to the price of the same 2018 Ford focus ST in 2023 which ranges from 47,490 for a basic trim level hatchback to as much as $51,990.
I think you would agree with us by thinking these prices are totally insane but as much as we want to deny what is happening with our beloved automotive industry, we have to accept that this is the new reality. A lot of the recent changes in this industry have created new enthusiasts’ markets mainly composed of people that seek out gas powered vehicles that may no longer be available or are set to be discontinued within the coming years.
No one knows what the future holds however, signs point to continuing changes and fluctuation of prices. Anything considered as ‘Special” will continue to increase in value so, if you have had your eye on something special by modern standards such as a Ford Mustang, Nissan Z, Subaru WRX and similar enthusiast vehicles the time to act is now.
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