If you've recently tried to buy a used car, you'll know just how frustrating the experience is right now -- a drawn-out semiconductor shortage is limiting what's available to buy new and sending demand for used models to unprecedented heights.
Last month, Chevrolet unveiled a new version of its Trax SUV -- the car brand owned by General Motors (GM) - Get Free Report first unveiled it in 2013 as an "entry-level SUV" meant as a transition for those looking for a larger sports vehicle who weren't ready to pay a higher price. Hybrid Cars
In the 2024 model, Chevrolet gave the Trax a sportier design and more tech features. But as always, it is being positioned as the most affordable one can go while still getting an SUV -- the ultra-compact vehicle starts at $21,495 and goes up to $24,995 for those looking for additional trims.
A comparable model from another brand would be the Mitsubishi (MSBHF) Outlander Sport starting at $21,445.
While inflation will eat the savings away by the time the car goes for sale next spring, the new price of the Trax is also a couple of hundred dollars cheaper than the retail cost of models currently on the market.
The $21,495 price also happens to be more than $6,000 less than what, according to the latest report from the Kelley Blue Book, the average buyer paid for a used car in September.
That $28,237 number is a 0.6% jump from August.
While that number encompasses many different and more expensive cars, a shortage of new cars that are available without a waiting list is significantly upping the value of used cars.
Some estimates show that global carmarkers produced 8 million fewer cars than planned in 2022 due to both supply chain disturbance from the pandemic to the microchip shortage.
In some cases, carmakers are releasing cars without some of the advanced digital features for which semiconductors are necessary.
Back in the spring, vehicle search-engine iSeeCars calculated that while the Mercedes-Benz G-Class starts at $131,750 for a new model, people on the site were buying lightly-used versions for roughly $62,705 more or almost $200,000.
The Chevrolet Corvette cost 20.2%, or $16,645 more, than the $63,000 retail price while a lightly-used Tesla (TSLA) - Get Free Report Model 3 commanded an average $8,300 more than asking price.
These numbers fluctuate based on what's available at a given moment, but buying used has the major appeal of immediacy -- being able pay and drive off without, for one reason or another, being placed on a waiting list.
Kelley Blue Book's numbers still show that new car buyers paid an average of $48,094. While that is predictably much higher than the $28,237 paid by those buying used, current market conditions are such that some may actually be saving money by buying a new -- whether by waiting or going for more affordable models like the Trax.
Semi Truck Sleeper “It's hard to predict what will happen in the next 6-12 months, but it appears that supply of new and used cars will continue to be constrained, and demand will remain high,” Grant Feek, the CEO of car resale platform TRED, told TheStreet last month. "Consequently, it seems unlikely that we'll see substantially better deals in the next year."