Because of the chip shortage, now may not be the best time to buy a new car as prices are high and higher-end features may not be included. But according to a new report from Edmunds, now is an excellent time for consumers to trade in their old vehicle. The outlet reports that the average value for used vehicles that were traded in earlier this March hit an all-time high to $17,080 compared to $14,160 last year. Of course, it all depends on what kind of vehicle you’re trading in at the dealership.
Unsurprisingly, Edmunds’ data found that pickup trucks commanded the highest trade-in prices. The outlet analyzed 2018 model year vehicles that were traded in during March and found that the Ford F-250 Super Duty, GMC Sierra 2500HD, Ford F-350 Super Duty, Toyota Tacoma, and Ram 3500 were the top five models that had the highest trade-in values in March. The average trade-in value for the 2018 F-250 Super Duty was $48,892, which means the Ford retained 80% of its value. The average trade-in value for the 2018 Ram 3500, which sits in fifth place according to the data, was $49,650 or 79% of its original value.
Beyond pickup trucks, luxury sports cars, sports cars, midsize SUVs, compact SUVs, and luxury large SUVs also averaged high trade-in values. Luxury sports cars had an average trade-in value of 65% of their original value, while luxury large SUVs retained 59% of their original value.
At the other end of the list, luxury large cars, luxury midsize cars, luxury subcompact cars, luxury subcompact SUVs, and subcompact cars had the lowest trade-in values of any body style. Luxury large cars retained 54% of their original value when traded-in, while subcompact cars retained 52% of their value. The average trade-in value for a luxury large car was $54,392, while consumers trading in their subcompact car received an average of $10,404.
Because of the chip shortage, Edmunds’ data reveals that new vehicle inventory at dealerships is down 36% compared to last year. With the shortage expected to carry into 2022, we expect the trend of consumers getting more for their trade-in to continue throughout the rest of 2021.
For shoppers, including those that may have poor credit, it’s important to remember that while dealerships are prepared to give you a lot of money for your old vehicle, prices for new and used cars are higher than ever, too. Higher trade-in value also means that consumers will be getting fewer incentives and discounts. We've already seen Chevrolet discontinue its 0% APR deal ahead of the Memorial Day holiday.
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