Retail has had some of the wildest years since the pandemic commenced. In the past three years, we’ve seen how demand for some goods increased to unprecedented highs, supply chain issues have only exacerbated delays and product shortages, and prices have continued to climb because of increased demand. And although the market is gradually returning to normal, things are still peculiar. Just look at the automotive industry where certain almost new vehicles are appreciating on the used car market.
While during the pandemic, we got accustomed to seeing pre-owned cars sell for astronomically high prices, multiple market signals suggest that the market is cooling off. For instance, pre-owned car prices dropped 2 percent from September in the first half of October and are down 10.3 percent from 2021, according to The Manheim Used Vehicle Index. Interestingly enough, prices are declining despite the high interest rates and volatile market conditions. But not all models are depreciating, so buyers should be on the lookout for good deals and discounts. The latest data on used cars from iseecars.com highlights that certain vehicles not only hold their value but also appreciate and win in value. So, here’s why certain almost new used cars are appreciating in value right now.
These Are The Almost New Vehicles That Are Appreciating On The Used Car Market
Carscoops points out that because of pandemic-induced supply chain issues, the average three-year-old vehicle lost only 16.9 percent of its value by 2022. By contrast, one year earlier, the average vehicle had lost 23.8 percent of its value after three years. But it surprised some lucky owners to find that out their almost new cars appreciated instead of losing in value. The Porsche 911 is the car that won the most in value. Considering how much the prices of 911 have grown in the past years, it is hardly surprising that the 911 is becoming such a fantastic investment. Owners of the 911 won an average of $11,373, or 5.7 percent, on their vehicle’s value if they would sell it again today. Another Porsche vehicle, the Cayman, won 1.8 percent in value, which is the equivalent of $1,342. Meanwhile, the Jeep Wrangler and Wrangler Unlimited, have won 0.3 percent and 2 percent, respectively in value. And the Toyota RAV4 Hybrid has appreciated by 2.5 percent in the past three years.
Those who purchased other in-demand vehicles like the Mercedes-Benz G-Class, the Honda Civic, the Subaru Crosstrek, got a great deal as well. They didn’t win thousands of dollars in value, but they didn’t lose big bucks either. These vehicles lost just less than five percent of their value between 2019 and the current time, according to the iseecars study. When it came to vehicles that were five years old, the Jeep Wrangler and its four-door brother maintained their worth the best in 2022, according to Carscoops. The Porsche 911 also held its value pretty well.
This Is Why These Models Are Winning In Value
The vehicles that appreciated are all in-demand vehicles that were always highly desired by customers. Elsewhere, supply chain issues and the pandemic-related shortages and lockdowns have forced automakers to shut down production for weeks. Naturally, this has created delays and transport bottlenecks. For instance, the pandemic has forced Porsche to shut down its Leipzig and Zuffenhausen assembly lines between March 2020 and May 2020. Unfortunately, despite the employees’ return to work, the problems persisted, and the plants continued to operate below capacity because of supply chain disruptions. Elsewhere, the cargo ship Felicity Ace, which was carrying more than 1,000 Porsche automobiles bound for North America, caught fire and sank in the Atlantic Ocean in February 2022. This has created additional pressure on existing inventories.
“Just as Covid-19 impacts appeared to be waning, the war in Ukraine severed key links in the Porsche Supply Chain as Ukraine is home to multiple Porsche parts suppliers,” says Porsche Louisville. “This has caused production lines for Macan, Cayenne, Panamera, and even the iconic 911 and Taycan to stop for weeks at a time as recently as March of 2022 to allow parts supplies to recover.”
Needless to say that when demand exceeds supply, prices go up. It doesn’t help that Porsche buyers have to wait for months to have their dream car delivered. According to the Porsche Club Great Britain forum, Porsche buyers have to wait anywhere from 9 months all the way to 18 months to finally get their dream vehicle.
In an interview with Herbert Diess, VW CEO, Bloomberg pointed out that the “wait times for the Porsche 911 are 12 months, 18 months, if I can even get an allocation.” To which Dress replied “We are ramping up the second half of the year, so delivery times should shorten, and then as we are a little bit cautious about the outlook next year, we can significantly reduce the waiting times, but we are also not really doubling up capacities, because the world will remain unstable. That’s our assumption, so we have to be a bit cautious."
Sources: Bloomberg, iseecars, Porsche Club Great Britain, and Porsche Louisville.