Soaring

A supply crunch has sent used-car prices soaring. These 16 models are now worth more used than new.

A gray 2020 Kia Telluride on a green lawn.

A new Kia Telluride costs close to $4,000 less than a used one – if you can find one. Kristen Lee/Business Insider

  • Car dealers are facing a supply crunch that’s sent used-car prices through the roof.

  • Some 2019 and 2020 cars are now cheaper to buy new, an analysis from iSeeCars found.

  • The Kia Telluride costs $3,564 more to buy used than new, the analysis found.

  • See more stories on Insider’s business page.

Skipping a brand-new car for one that’s lightly used has always been the most wallet-friendly way to buy a car. Not anymore.

In the strange and sometimes utterly backward-seeming times we’re living in, it’s actually cheaper to buy some cars new rather than secondhand. A recent analysis from the automotive-research site iSeeCars.com identified 16 such vehicles, some of which cost thousands more to buy used.

The pandemic has led to a diminished supply of cars and

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Car prices are soaring, and they’re not going to stop

Car dealer lots have only a fraction of the vehicles — both new and used — that they typically have. That’s helping send prices to record levels and lifting the nation’s overall inflation rate.

Car dealer lots have only a fraction of the vehicles — both new and used — that they typically have. That’s helping send prices to record levels and lifting the nation’s overall inflation rate.

And the price increases aren’t over yet.

The average new car price hit a record $38,255 in May, according to JD Power, up 12% from the same period a year ago.

About two-thirds of car buyers paid within 5% of the sticker price in May, with some even paying above sticker.

Wholesale prices for used cars sold at auction are up 39% since the start of this year, according to other data from JD Power. Retail used car prices are

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Car Prices Are Soaring. Why Are Car Dealer Stocks Down?

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Used cars at Frank Bent’s Wholesale Motors in El Cerrito, Calif.


Justin Sullivan/Getty Images

Inflation data surprised to the upside Wednesday. That’s one estimate “beat” investors didn’t want to see. But a big reason for higher-than-expected inflation was car prices, which are soaring.

That should be a good thing for car-dealer stocks. But they are down on Wednesday.

Shares of online car dealers

Carvana

(ticker: CVNA) and

Vroom

(VRM) are down 5.9% and 2.3%, respectively, in recent trading. That compares with 1.3% and 1% respective drops in the

S&P 500

and

Dow Jones Industrial Average.

Traditional dealer and car-information provider stocks are weak Wednesday as well.

AutoNation

(AN),

CarMax

(KMX), and

Sonic Automotive

(SAH) shares are down about 2% on average. Shares of auto-data providers

Cars.com

(CARS),

CarGurus

(CARG), and

TrueCar

(TRUE) are down roughly 3%.

This feels wrong. Brokerages are spread businesses buying and selling

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