Welcome back to another installment of Sell My Car Colorado’s news, which often just becomes a colossal bummer of expanding prices and lowering positivity around the used car market. With summer slowly (and I mean slowly) dwindling its way out of the atmosphere, many trends are coming full force. Summer gas is out, people are buying vehicles fit for Colorado winters, and used car prices are all over the place, as usual. Let’s break it all down in our used car news for September!
If you happened to miss our used car news for last month, check it out here. There we broke down the top-selling used cars over the past year. Just as a hint, Ford remains the best, just like every year.
But, it’s time to stop living in the past. Here’s a recap of everything that happened in September.
Let’s Check in on Used Car Prices – Moving… Kinda?
Here goes our monthly check on the current used car landscape. It wouldn’t be used car news in September without it, would it?
Last month, we saw a slight-but-insignificant uptick in the market. The average price for a used car in August sat at around $28,219, a $200 increase from the month prior. As we stated then, the $200 was probably not enough to raise eyebrows, but it may have hinted at a gut-wrenching trend. Could the market be heading back up to its record-setting highs seen in the summer?
Could the ever-fluctuating market be going back towards its peak? Will the market ever return to normal? Does the sun set in the east?
Luckily, the Manheim Used Vehicle Index noted that the average used car price fell around 4% in August and looks to follow the trend through September. As of September 21st, the average rate had dropped 1.4%. Therefore, the market is the lowest it has been since this time last year.
Shall we rejoice and begin throwing money at the nearest car dealership? Not necessarily.
It’s still important to note the shock caused by both inflation and the former pandemic that rocked the nation (and not in a good, rock’n’roll way). Basically, remember to consider the numbers regarding the initial comparison. Prices dropping 11% may sound dandy, but that ignores both retrospect and beginning numbers. An 11% drop from the record-breaking 40% price hike in January is still 29% higher than ever before.
Many may refer to the plateau as normal, but remember that it is a new norm. We may never return to the numbers present before COVID-19.
California All-in on Electric
If you are a Californian perusing the new car market, your decision may be made for you.
On August 25th, California Governor, Gavin Newsom, signed the bill announcing that “California now has a groundbreaking, world-leading plan to achieve 100 percent zero-emission vehicle sales by 2035.”
The plan is both simple and concerning. By 2030, 68% of all new cars sold in the state must be electric vehicles (EVs). By 2035, the entirety of the Californian market must be electric. Within 13 years, you will not be able to purchase a gas or diesel vehicle in the Golden State.
Now before you jump to dystopian-based terror, it’s crucial to look at the importance of the matter. Though forced decisions are often seen as negative, there is a basis for this one. California still remains one of the worst pollution offenders in the country. The state’s air quality still remains one of the most dangerous in the country. If we truly stand by looking toward environmental health in the near future, electric vehicles are one of the pillars of improvement.
The problem lies in price. Electric vehicles are still significantly more expensive than gas. If the market becomes entirely electric, what will the used gasoline market look like?
Furthermore, what stress will the influx of EVs put on local electrical grids?
Californians may see a drastic increase in prices of electricity, used vehicles, and new vehicles by 2035. But, we must remember the importance of our environment.
Gas Prices Rising in Colorado (Again)
Moving on to the next used car news in September, you might wish that Colorado initiates the same EV bill as California.
Gas prices in Denver are on the rise, again.
As of September 26th, the average price for a gallon of gas is $3.74, a rise of 8 cents since last Monday. Like the used car market, the increase may not be significant, but it may imply a heartbreaking trend.
This slight increase breaks the streak noted by Bespoke Investment Group in their August report. Gas prices had steadily dropped for over 70 days before this month. This exceptional streak was the second longest gas decline since 2005. Though switching from summer-rated gas over to that of cooler months often calls for a price decline, it seems this year may be different.
The lowest price for a gallon of regular gas in Colorado is $2.14. Unfortunately, that is in Divide. If you want to make the two-hour trip for cheaper gas, you go for it.
Some Cars Are More Expensive Used Than New
We will round out our September used car news with some more deflating (yet eyebrow-raising) statistics.
In a world where used car prices look like a loop-filled rollercoaster and inflation looks like a bunk ladder, nothing impresses us. As a car-buying website, we have to keep a close eye on all things car-related. After years in the industry, and especially after the last five, we aren’t phased. The news recently stated by Business Insider is a bit concerning, though.
Some of the most popular used vehicles are now worth up to $6,000 more than their new versions.
No, we’re entirely serious.
An August study from the car insurance savings app Jerry found that seven out of the ten most popular used cars are worth more than their new counterparts. This list included:
- Toyota RAV4 ($5,900 more)
- Honda Civic ($5,300 more)
- Honda CR-V ($3,800 more)
- Toyota Camry ($3,200 more)
- Nissan Rogue ($3,100 more)
- Toyota Highlander ($2,100 more)
- Ford F-150 ($100 more)
How is this possible? It all stems back to the crushing supply chain holding a close strangle on the world.
As chips and other parts become increasingly difficult for automotive manufacturers to find, the number of new cars dwindles. If the company cannot produce the normal amount of a vehicle, that makes the used version more valuable than before. If the supply of the new version drops, the demand moves over to the less restrictive market.
Ultimately, you end up with the price of used cars increasing drastically while the new versions stay the same because they aren’t accessible. Once accessible (if ever), the new prices may follow suit to the demand of the used, balancing out to the old and more-stable price ratio.
At the end of the day, avoid those aforementioned vehicles unless owning one is a life-or-death situation. If you are looking to sell one of them, do so now. Your profit is currently sitting at an all-time high.
Furthermore, we can sell the car for you ASAP. As a car-buying website, we make the process as easy as clicking a button.