PORTLAND, Ore. (KOIN) — They say a new car begins to lose value the moment it is driven off the lot, but this may no longer be the case as a recent study found some of the nation’s best-selling vehicles are more expensive to by second-hand than brand new.
This Jerry study analyzed the Manufacturer’s Suggested Retail Price (MSRP) to compare state-specific and national prices for new and used 2021 car models with 20,000 miles or less and found “four of the top 10 best-selling vehicles in America cost more to buy used than new, and that drivers in Oregon pay the most for these used models when compared to other states.”
The team behind the study said this shift, along with the high sticker prices in Oregon, can be attributed to supply chain issues — which have been made worse by the COVID-19 pandemic, according to Jerry.com.
“The pandemic-driven disruption to vehicle production, including the chip shortage, has resulted in long wait times for new cars, forcing many consumers to the used car market,” the study stated. “The Bureau of Labor Statistics’ used car price index rose 41% in February 2022 from a year earlier.”
According to the report, the new vehicle shortage combined with an influx in demand for second-hand cars has contributed to the subsequent rise of used car sticker prices in states like Oregon.
Researchers said this market disruption has only been exacerbated as popular car manufacturers have been forced to slow down or stop production due to COVID-19 surges and worker shortages.
“Many car manufacturers, including Toyota and Honda, have had to cut production despite strong demand, resulting in fewer new cars on dealer lots and longer wait times for delivery,” the study says. “This has driven up the value of both new and used cars.”
The writers continued, “According to Edmunds, 82% of people who bought a new car in January 2022 paid more than the MSRP, compared to just 2.8% a year earlier. Others turned to the used car market – and many paid more than the list price of a new one.”
After comparing the prices of lightly used 2021 car models for the nation’s most popular vehicles, researchers at Jerry.com found the Toyota RAV4, Honda CR-V, Toyota Highlander and Honda Civic are now more expensive to buy used than their new 2022 counterpart models.
Of the four car models that had higher second-hand sticker prices, the study found Oregonians and Mainers currently pay the most when compared to residents from other states.
While research showed drivers in Oregon and Maine pay the highest prices for popular used car models, the study pointed out that neither made the iseecars.com list of the top 10 states with the largest bump in used car prices between 2021 to 2022.
“The higher prices in Maine and Oregon might have something to do with population,” study contributors explained. “Both rank in the bottom 15 states in population density, while Connecticut, New York, and New Jersey ranked as the least expensive states to buy used versions of the four popular models named above. It’s likely that high population density means a better-stocked used-car market, and therefore better prices.”
Although Oregon did not see a major jump in used car prices in 2021, the study showed all U.S. states saw some increase in the price of second-hand vehicles last year.
Despite the decreased supply and rising car costs, the Jerry 2022 State of the American Driver Report showed that 25% of drivers in the U.S. plan to purchase a vehicle this year.
For drivers in states like Oregon and Maine, the company recommends buyers may want to pass up their first or second car choice to avoid sticker shock or long wait times.
“To ensure that Oregonians stop paying exorbitant prices for a used car, Jerry advises them to start shopping weeks or months in advance and consider buying a second or third choice model,” Jerry said. “Shopping for a new car well ahead of when you would want to drive it off the lot can keep you from paying too much and can ensure you get the car you want on time.”
The company also advises considering what your needs actually are and determining if your second or third choice would make you almost as happy.
“That compromise could save you time and money,” they said.