Just how maddeningly tumultuous is Southern California’s used car market?
Consider the region’s hottest vehicle — the quirky, electric Nissan Leaf. Yes, car-crazed SoCal is rapidly bidding up the price of a car once ranked among the ugliest and most likely to depreciate.
Let’s set the scene. A global computer chip shortage means there are few new cars to buy. So the used car lot is where all the action is.
Surging car values plus record-high gasoline prices — not to mention some economic uncertainty — made folks shopping for transportation rethink their buying tactics.
It’s hard to fathom, but Southern California prices for used vehicles were up 30% to $31,883 in the year ended in November, according to an analysis by iseecars.com. I say “only” because prices were skyrocketing in June, up 33% in a year!
And a recent bout of penny-pinching by shoppers helped make the Leaf the used car with the largest one-year price gain in November: up 64% (or $8,482) to $21,714.
Yes, historically, the Leaf has enjoyed some buzz.
It debuted a decade ago as an industry pioneer with its all-electric power and was named 2011 World Car of the Year at the New York International Auto Show. It was the best-selling EV until Tesla came along.
When I chronicled my test drive of a Leaf in 2012, I called the curiously shaped vehicle “a fun and peppy drive.” A 2018 makeover also drew some positive reviews.
But over the years the Leaf has also been mocked.
Its odd original look put it on Edmunds.com’s 2013 list of 100 ugliest cars: “a bubble gum bubble with door handles.” Or when the gurus at Kelly Blue Book ranked cars in 2014 by their expected resale value, the Leaf was dead last, projected to hold just 18% of its purchase price over five years.
“The big picture in this topsy-turvy market is that even cars that are typically in low demand are in high demand right now,” says Julie Blackley at iseecars.
It’s likely those old deep discounts for Leafs now make it popular. And cost savings were definitely on the mind of car buyers in November. Let’s look at other used cars with giant price bumps. Most are small and fuel-efficient …
— No. 2. Nissan Versa: Up 53% — or $5,342 — to $15,440
— No. 3. Chevrolet Spark (another EV): Up 50% — or $5,130 — to $15,370
— No. 4. Kia Forte: Up 50% — or $6,241 — to $18,798
— No. 5. Toyota Corolla: Up 47% — or $6,673 — to $21,024
Gas prices are a big factor in escalating used car prices. Blackley notes the average used vehicle nationwide is 28% pricier than a year ago. When you peek at fuel-efficient options, hybrids prices are up 38% and electric vehicles are up 58%.
Yet, November’s focus on cheap wheels is a dramatic pandemic pivot in what type of used cars are getting the biggest prices hikes.
“Earlier in the year, large/expensive SUVs were in high demand and economy cars weren’t subjected to the same price increases,” Blackley says. “It was also a separation between the haves and the have-nots, as the majority of people buying cars were flush with cash.”
Now, let’s go back to June and see what topped the local list of bid-up models. They were largely bigger, sportier luxury vehicles …
— No. 1. Lincoln Navigator: Up 65% — or $27,349 — to $69,424
— No. 2. Audi A8 L: Up 56% — or $20,357 — to $56,515
— No. 3. Mercedes-Benz G-Class: Up 53% — or $59,442 — to $171,809
— No. 4. Volvo S60: Up 49% — or $9,339 — to $28,244
— No. 5. Chevrolet Corvette: Up 48% — or $24,660 — to $76,358
The switch in what’s hot is more than changing automotive tastes. The summer had its fair share of economic challenges including inflation and supply chain shortages, plus California’s lingering employment headaches. That kind of uncertainty chills consumer confidence and makes thriftiness a priority.
“Now, there is a heightened demand for affordable transportation,” Blackley says. “People who were previously in the market for larger, more expensive cars, have been priced out of those segments. Economy cars are their only option.”
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
