The average price for a one-to-five-year-old used car in Detroit is currently around $31,000. While that number is more than 30% higher than it was 12 months ago, it is lower than where values are across most of the country.
Karl Brauer is executive automotive analyst for ISeeCars. He says the average used vehicle price nationwide has climbed to about $40,000.
“There’s going to be another 6- to 12-month timeframe of increased prices before that starts to back off.” — Karl Brauer, ISeeCars
“We are still seeing these kind of month-over-month and year-over-year increases in used car prices,” says Brauer. “We haven’t apparently topped out yet.”
The spike in used car prices is tied to microchip supply chain issues — fewer new cars rolling out of showrooms means fewer used cars are making their way onto resale lots. In the last five months alone used car prices have risen by more than $10,000 as a result.
Automakers have signals they are starting to receive more semiconductors, but say it could still take a year before new vehicle productions normalizes. Brauer says it will likely take longer than that for used car prices to start going back down.
“Even when microchips are available at the level we need them,” says Brauer, “there’s going to be another 6- to 12-month timeframe of increased prices before that starts to back off.”
Listen: Karl Brauer talks rising used vehicle prices.