For so long, 100,000 miles has been seen as the tipping point for a vehicle’s reliability and monetary value, but in this topsy-turvy post-pandemic world, that’s changed — dramatically.
A new study by the analysts at Edmunds.com revealed the average transaction price for all vehicles sold with 100,000 to 109,999 miles at U.S. dealers was $16,489 in June. That’s up nearly $4,000, or 31%, from June 2020 when the ATP for those vehicles was just $12,626.
Not only did they sell for a much higher price, they moved off dealer lots a week faster, the website noted, moving from 37.7 days to turn last year to just 30.5 days last month.
“It’s been a long-held belief among many car buyers and sellers that a vehicle’s value begins to decline dramatically once it crosses the 100,000-mile mark, but that’s proven to be wrong as vehicle technology and durability have greatly improved over the years,” said Ivan Drury, Edmunds’ senior manager of insights.
“The soaring demand we’re seeing in the used vehicle market right now only further debunks this myth: We’re seeing 7- to 8-year-old vehicles with more than 100,000 miles commanding prices today that are more like the cost of 5-year-old vehicles with 60,000-80,000 miles a year ago.”
Mo’ money, mo’ money, mo’ money
The higher prices can be attributed to several factors. First, prices for all types of vehicles are up this year as demand is strong, but supply is suspect. After being penned up for a year, many consumers are ready to buy vehicles after putting off that expense because of the restrictions.
Additionally, buyers still love utilities and trucks — bigger ticket price vehicles. The ongoing chip shortage has crimped the availability of new trucks and utes so used buyers are now competing with former new vehicle buyers who have reconfigured their requirements to allow for used vehicles.
Finally, there’s been a push to remind potential buyers that vehicle quality has been on the rise for several years and it’s now reasonable to expect a vehicle to last well beyond 100,000 miles.
Tell me what you want, what you really really want
For new buyers, pickups, sport-utility vehicles and crossovers top the wish list — and it’s no different for used vehicle consumers, according to Edmunds.
Trucks topped the list of the greatest year-over-year increase in average transaction prices: The Chevy Silverado 1500 hit an ATP of $26,914 in June 2021, which was a 49% year-over-year increase; the Ford F-150 climbed to $25,924, which was a 43% increase; and the Ram 1500 commanded an ATP of $24,657, which reflected a 42% increase.
Vehicles that sold faster year over year were more of a mixed bag. The Jeep Wrangler topped that list with an average DTT of 29.7 days, a 37% year-over-year decrease, followed by the Ram 1500, which had a 28% year-over-year decrease in DTT to 27.4 days. And the Honda Civic came in third with a 25% year-over-year decrease in DTT to 28.3 days, the website noted.
That used pickup sitting in the driveway may not be more valuable ever than it is right now. So if the prospect of paying more for a newer vehicle is putting a stop on your decision to buy, know that your trade in is also one of those “high priced” vehicles.
“Consumers with an old truck sitting in their driveway are in the best position to take advantage of this wild market,” said Drury.
“But even if you own an SUV or passenger vehicle that’s a bit long in the tooth, you shouldn’t be too quick to assume its value is dead. Chances are it’s worth a bit more — if not a lot more — than you think, which you could use to offset the cost of your next car purchase, or you could simply pocket the extra cash.”