Orlando's used car prices are rising rapidly, outpacing most of the country.

The global microchip shortage is restricting new car supply, which leads to restricted used car supply due to fewer people trading in their used cars. This combination of diminished supply and increased demand has caused used car prices to soar.

According to iSeeCars.com’s latest analysis of more than 1.2 million used car sales in April 2021, used car prices increased 16.8%, or $3,926, compared to the same period the previous year. Used car prices typically remain relatively constant year over year, as 2019 had a 0.2% reduction over 2018, and 2020 had a 0.1% increase over 2019.

In Orlando, the increase is even higher. The average used vehicle in the City Beautiful increased by 19.6% year-over-year for a nominal gain of $4,165.

Las Vegas posted the highest growth rate at 25.2%.

In Florida, Jacksonville's used vehicles increased 23.5% year-over-year for a nominal increase of $5,013, while Tampa's used vehicles increased 19.8% year-over-year for a nominal increase of $4,342.

“The current used car price increase is unparalleled, and prices will likely remain elevated for the foreseeable future due to the magnitude of the global microchip shortage and restricted new car supply,” iSeeCars Executive Analyst Karl Brauer said. “We’ve identified the used cars with the greatest price increases, which can represent lucrative trade-in opportunities for their owners.”

The reason for the even more drastic uptick in Florida is twofold, Brauer said.

The categories with the highest appreciation in used car prices over the last year have been pickup trucks and luxury vehicles. Between Florida's need for utility and work vehicles and the weather, Brauer said he isn't surprised the state's metros have seen an outsized uptick in vehicle prices.

The other reason for the drastic increases, Brauer said, is increased demand due to an influx of new residents moving to the Sunshine State.

However, he doesn't see the problem getting much worse. "The price has moved up [in the] past three months due to the shortage of new cars. I don't think it's going to keep getting worse like it has [in the] past three months, but I think it's going to probably stay pretty flat at this level for most of the rest of the year."

Despite used car prices being historically high, Brauer said there are still deals to be made if the buyer is willing to travel farther to look at vehicles or look at less popular models or brands that didn't see the same price appreciation.

Meanwhile, automotive research firm iSeeCars.com said the average days to sell a used car in Orlando was 33.5 days in March, compared with the national average of 39.4 days, and some models were only on the lot for a fraction of that time. Further, used cars in Orlando went faster than new vehicles, with the average new vehicle locally selling in roughly 55.6 days.

Tesla's (Nasdaq:TSLA) Model 3 took the top spot for fastest-selling used cars cars locally, at just 13 days on the market.

Original Post: https://www.bizjournals.com/orlando/news/2021/06/11/orlando-used-car-prices-among-fastest.html