I have been saying Post-Covid that what used to be a $3k used car is now a $5k used car. I have no firm proof of this but it is my general feeling. It should be noted that when I make that statement, I am talking about just plain ole regular used cars. The kind of car that you might buy for your high school kid to drive to school.
Well, today I came across some interesting data to share.
I was on IAA searching what will be auctioned off this week locally. I came across a silver Pontiac Vibe. It looks just like the other two Pontiac Vibes I have bought at salvage auction in the past couple of years. The data that I will be focusing on is the value assigned to each car in its pre-accident condition. On the IAA site this is listed as ACV or Actual Cash Value.
#1 is this Vibe being currently auctioned off with pictures taken 1-14-21
2005 Vibe w/ 45k miles
ACV: $5,832 around 1-14-21
This second screen shot, near the bottom right shows Actual Cash Value (ACV)
Next are screen shots of the two cars I bought in the past:
2003 Vibe awd w/ 67k miles bought Jun '19
ACV: $4,728
2005 Vibe w/ 97k miles bought Dec '18
ACV: $4,541
I know this is not an exact science but two of these cars were insured and then valued by State Farm and one by Progressive. I'll bet they are very good at what they do in assigning these values.
So, some things I notice:
Jan '21 '05 w/ 45k = $5,832
Jun '19 '03 w/ 67k = $4,728
1.5 years has past since these two cars sold. The '03 is a 2 year older car than the '05 making the cars now generally the same age old in the marketplace or the '05 is half a year newer.
$5,832 - $4,728 = the '05 will now value for $1,100 more than the same value 2 years ago. That is nearly a 25% increase in valuation.
Yes, the current valuation is for 22k less miles but that alone is not 25%. The '03 was also higher equipped w/ the awd option. I'll call that a wash and show the 25% increase for a very same car.
Dec '18 '06 w/ 97k = $4,541
Exactly 2 years has past since these two cars sold and the higher priced car is a year older so the cars are 3 years different in the marketplace.
$5,832 - $4,541 = the '05 will now value for $1,291 more and that is for a car that is 3 years older in the marketplace. This $1,291 is nearly 29% higher valuation.
Yes, that 29% higher is for a car w/ 52k miles less (97k vs 45k) but that alone does not make up the 29%. Besides the lesser valued car had more options including alloys, sunroof and better radio.
So, informally, these values are up 25% and 29% for what I think you can see are very average cars of very similar quality.
(Ignore the accident damage. This ACV is a determination of pre accident value by the insurance company. ERC or estimated repair cost is a valuation of damage repair costs)
My initial premise was that what was $3k is now $5k (or what would be a 66% increase.) This data shows that from an insurance company valuation stand point, there is a 25% to 30% increase. Maybe not 66% but nearly half way there!