Certain used cars, including the Toyota RAV4 Hybrid and Tesla Model 3, now cost more to buy used than new, according to a recent iSeeCars.com analysis of vehicle prices.
Average transaction prices for used RAV4 Hybrids are 3.9% higher than new, while the average used Model 3 sells for 2.9% more than a new one, according to the analysis, which encompassed over 470,000 vehicles listed for sale in June 2021.
The firm has one simple reason for the markup: Dealers are betting that shoppers will pay more for a used car they can have now, rather than waiting for a new car.
2020 Tesla Model 3
Used EV (and hybrid) prices have been tracking up since early this year, due to the recovery of the economy and due to a shortage of new vehicles. Previous studies have also shown that used Teslas tend to hold their value well, and then sell quickly as used cars.
However, that hasn’t been the case for non-Tesla EVs until recently. Used EVs were a hard sell until late 2018, when the entire market for used EVs started showing new life.
Used EVs might not seem attractive because most incentives—including the federal EV tax credit—apply only to new cars. But used EVs can still be a good value, and limited supplies of new cars can make them more enticing to buyers who don’t want to wait. More-generous incentives proposed by the Biden administration could change things, granted.
Updated: An earlier version of this article stated the cars surveyed were listed for sale in January 2021. They were listed in June 2021.
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