That’s how much more you’d have gotten if you traded in a used car in March compared with a year earlier, according to data from Edmunds, an online provider of information about car shopping, as demand surges for used vehicles.
Steady for years, the average trade-in value of a car fell at the beginning of the pandemic, dropping from $14,160 last March to around $12,000 in May and June, before circumstances collided that caused the value to jump to an all-time high of about $17,080 in March.
A pandemic- and stimulus-driven burst in sales sapped the existing inventory of new cars and trucks, and manufacturers couldn’t make more due to a global semiconductor shortage that’s causing shutdowns at car factories. That’s left fewer new vehicles on car lots—inventory is down 36% compared to last year, according to Edmunds—but dealers are still seeing strong demand as people continue to avoid mass transit and the vaccine rollout helps hasten a return to in-person work. To meet demand, dealers are turning to used vehicles, and paying more for them. Used vehicles are retaining much of their sticker price at trade-in as a result, with trucks, in particular, receiving up to 77% of their original value.
"Until automakers can start cranking out new vehicles again, we're going to see increased demand and higher trade-in values for used vehicles as well," said Jessica Caldwell, executive director of insights at Edmunds, in a statement. "These two factors combined are disrupting the market in a way we haven't ever really seen before."