Buying a car is throwing money away. Just by taking it out of the dealer you lose between 10 and 20% and sometimes up to 40% of its value in the first twelve months. It’s it was what we have been told for years to recommend a used car, but in recent times that is no longer the case.
In fact, it is even possible that in the used car market they will maintain and even increase in value. Impossible? Not really. There have always been cars that, due to their collector’s interest, could even increase in value, but also some that, after a certain point of deterioration in value, began to appreciate. But what we have now is widespread.
The used cars that until now rose in value
This has happened until now in markets with high inflation, such as Brazil. When inflation was so high that it used to be equivalent to the depreciation of the car, many times for a family, buying a car was a way of depositing money, of investing. It did not lose value and could also be used to go from one place to another.
On the other hand we have the revaluation of exceptional cars appreciated by collectors. In 2013, a ferrari gto for 52 million dollars. In 2022 another GTO was sold for just over 70 million dollars. Both vehicles were of historical importance for the competitions they have run, but I would be surprised if the next GTO that is sold does not go up in price.
The revaluation of the used car also happens for more humble collection vehicles and more within the reach of mortals. For example, the Toyota Supra of the last century have been revalued as the owner of one has on your blog.
Also According to the CarVertical vehicle history platform, some cars have been revalued between 2022 and 2022, the Alfa Romeo GTV (1993 – 2004) increased in value by 143.6%, going from being sold for 3,226 Euros to being sold for 7,859. The Audi V8 (1988 – 1993) increased in value by 33.9%, going from being sold for 16,933 euros to 22,666 euros. The Land Rover Defender (1983 – 1990) was revalued by 169.8%, selling for 8,228 Euros at 22,203. The Toyota Land Cruiser (1990 – 2006) appreciated less, 6.5% to sell from 15,592 Euros to 16,601 Euros on average. And the Volkswagen Corrado (1991 – 1995) was revalued by 101.6%, going from being sold for 5,389 Euros to doing so for 10,862.
But this has been something normal, cars that due to their characteristics are very few, are highly desired and there comes a time when they begin to rise in price. But this is not the only thing that happens, and that is…
Since the pandemic the used car market has gone crazy
In December 2022, a journalist from The Verge put his seven-year-old Honda Fit (the model known in Europe as Jazz) up for sale. An algorithm from used car giant Carvana He made her an offer she couldn’t refuse. If Sean Hollister bought it in December 2014 with the warranty extension for $20,814.80, Carvana offered him 20,905, a profit of 90 dollars and twenty cents on the car purchased. It is true that the Carvana Aglorhythm was more aggressive, but it is that other websites such as Vroom, TrueCar and CarMax offered him 5,000, 6,000 and 7,500 dollars respectively. Carvana’s offer varied each day, the highest he offered was $1,338 more than he accepted.
In the US, manufacturers are offering their customers up to 5,000 dollars for not selling their vehicles in a year, it is the case of Chevrolet and the Corvette Z06. You also end up paying more for other models like Tesla’s. In Spain, if we want to skip the eleven-month waiting list for a Tesla Model 3 Grand Autonomy, we can do it, paying eleven thousand euros more in the second-hand market. And it has not been uncommon to hear in conversations, how two or three months after buying a new car, the dealer called to buy it back, for more money.
We have all heard “the chips”, and to a lesser extent “The Ukraine War”, but it is certain that this situation will disappear. Car manufacturers begin to accumulate stock of chips on the one hand and they are adapting for another. Let’s add to this cocktail that the prices of second-hand cars start to fall in the UK. At the moment it is the only market where this situation is experienced, but it is possible that the recession will force the return of leasing cars bought on credit and that we will see them change hands.
We will have to wait, for now it is clear to me, if I had known, I would have bought some popular cars in 2022 coming out of the pandemic and sold them in 2022 at a profit. However, I was not graced with the gift of clairvoyance.
ask readers, Do you think second-hand cars will go down?