Making the Most of the Current Car Market
Interpret that statement how you will. If you’re in the business, you’re likely stressed about COVID, chip shortages, and disappearing inventory. If you’re an economist, you have to be worried about potential issues with supply chains, inflation, and the broader consequences of pent-up consumer demand. But what if you’re just an enthusiast looking for a cool car? There are lots of stories studying the causes and effects of the current automobile market. For now, let’s explore what it’s like to participate in it.
Something Doesn’t Add Up
Accounting for the above factors, used car prices have skyrocketed over the past year or so. Unless you’ve been frequenting Jay Leno’s garage, you know the market is tough for more frugal enthusiasts. How tough? Let’s take a look at the some of the Everyday Driver Greatest Hits currently listed on AutoTempest.
Exhibit A: Toyota 86
Wow! A base 2020 86 with almost 16,000 miles is listed for OVER the $29,630 MSRP of the 2020 Hakone Edition. And that car is now selling for $35k!
Exhibit B: Subaru WRX
If a 2020 Premium WRX MSRPs at $29,795, then obviously used examples should be going for $31-33k, right?
Exhibit C: Ford Fiesta ST
Maybe an older, discontinued model will fair better? Not so much. A 2019 Fiesta ST had a sticker price of $22,315. These older vehicles are ranging from $17,000 - $23,000.
I didn’t dig too deeply for deals here; I just went with the default search parameters for the greater Hartford area, which is near where I live. The great thing about car shopping is that it pays to do your research, which I would do if I were actually in the market. But, at first glance, it looks like it would take a lot of work to find a good price near me. Considering that many hits are from Carvana, it shows that there aren’t even many cars near my location. You prices may vary depending on your location, but these are not rare or expensive cars. Yet, they have gained insane value in today’s market to be sure!
Making Some Cents
I am certainly not a financial advisor. But it does seem to be a time in which four-wheel fun is demanding a premium. It is hard to find any vehicle right now, never mind one that’s fun and fairly priced. So what can a victim of the car disease do for some relief? Mind the old adage, “Buy Low, Sell High” for starters. Regarding automobiles, rather than securities, this puts most of us in one of two scenarios.
The former is obviously hard to do—especially if you’re pining for a new driving experience. Though it’s really a matter of willpower. The latter requires discipline as well, but it has more to do with knowing what you want and giving up something to get it. Like a pair of empty nesters looking to downsize, we can do the same with cars.
Maybe you daily a half-ton but no longer need that utility. They’re going for top dollar. Do you love your Charger, Camaro, or Mustang but want to get more into autocross? Horsepower is in high demand! Looking to sell a 911? Nuff said.
If you’re willing to let go of some comfort and capability, you may be able to get into a new, fun car and may even make some money in the process. Even the Minister of Finance can’t argue with that.
Sealing the Deal
Macroeconomic forces are bearing down on the entire automotive industry—used car markets in particular. If you are thinking of making a purchase, will you put it on hold, sell a vehicle you already own, or pursue a different strategy? Being an enthusiast is an expensive hobby in the best of times, so any conversation or advice in the comments is welcome. How will you make the most of the market?
Bill hosts a blog and YouTube channel that lead him to think more deeply about what it means to drive. The views and opinions expressed here are his own and may not align with the founders of Everyday Driver.