CarMax is trying to sell a 12-year-old Ford Ranger for $23,000
The used car market has been particularly problematic for buyers since the start of the coronavirus (COVID-19) pandemic. Used vehicle prices have steadily increased since the start of 2020, with some options like the 2021 Chevy Corvette currently exceeding their MSRP when new. However, one indicator that the situation could be getting worse is CarMax’s recent $23,000 price tag on a 12-year-old Ford Ranger.
Reasons for the current prices on CarMax and the used car market
According to the Los Angeles Times, the supply of used cars was insufficient even at the start of 2021, and the situation has only worsened over time. Of course, car prices will rise if supply is less than demand. As for why the offer is short, there are several reasons.
The first is that automakers can’t make used cars, and you can only work with models that are currently publicly owned. Add to that the fact that the car rental industry was one of the biggest sources of used cars. However, this changed at the start of the pandemic when travel was restricted. Therefore, instead of car rental companies selling their 12-month-old vehicles and buying new ones, they first sold their cars without buying replacements.
A few months later, those same car rental companies returned to the used market to buy back some models for their businesses. This, of course, reduced the number of used cars on offer. Also, since they hadn’t bought any new cars, that meant that 12 to 18 months later, they wouldn’t be increasing the supply of used vehicles on the market.
Second, banks have been more lenient with their repossession practices throughout the coronavirus pandemic, allowing consumers to delay some of their vehicle payments. This is another source of used cars that has been cut off.
On the demand side, people were worried about buying cars in the early stages of the pandemic. However, with the extra money they saved from the closures, fewer spending opportunities, and increased government benefits, they were more willing to spend on vehicles.
Unfortunately, this coincided with fewer new cars on the market, which meant more buyers had to turn to used cars. The result is that used car prices have skyrocketed, and one of CarMax’s recent announcements illustrates just how bad things have gotten.
The 12-year-old Ford Ranger CarMax at $23,000
CarMax is asking around $23,000 for a 2010 Ford Ranger with a 2.3-liter 4-cylinder engine. It’s also two-wheel drive and, to its credit, looks well-maintained. You can see it in the photos of the dashboard, the fabric seats and the bed, not to mention that the air conditioning also seems to be in good working order.
Despite the nearly pristine condition, there’s no hiding the truck’s age, and it’s easy to see that the price tag looks completely out of place next to the Ranger. For context, the 2022 Ford Ranger has a starting price of $25,285, just $2,285 more than the asking price for CarMax’s 2010 model.
The 2022 version will, of course, have a newer engine, better safety rating, better performance, and a host of other modern features. Plus, you can get the 2022 Ford Maverick for $19,995 as an alternative, which reminds you of how absurd the CarMax listing is.
True, there is a shortage of new vehicles, which complicates the purchase of a new van. That said, selling a 12-year-old Ford Ranger pickup truck for $23,000 is still ridiculous.
New cars and how changes in the auto industry have affected prices
With CarMax, the used car market has seen the biggest changes, but the new car market isn’t much better, with prices rising as well. Kelley Blue Book calculated that the average cost of a new vehicle in December 2021 was $47,077. Conversely, according to CNBC, the average car price in the United States in 2019 was $36,718.
The new car market is also experiencing insufficient supply due to chip shortages and supply chain issues, which are directly linked to the pandemic. Nevertheless, Car and Driver notes that car manufacturers and dealerships are also taking advantage of the situation.
Automakers seem to prioritize making more cost-effective models and trim levels over more affordable cars with their limited materials. Also, there is no need to include purchase incentives such as lower prices since demand exceeds supply. For the same reason, dealers were able to price cars significantly above MSRP and still sell cars.
RELATED: Is the 2022 Ford Maverick Big Enough for Adventure?