Record Sales = Used Opportunity?
Like pretty much everyone I know, Jeep has been on my wish list for a few years now. Especially the Wrangler. We've eyed the Cherokee and even considered the Compass, but the icon has my heart. Unfortunately, the premium price the Wrangler commands also means it may have one of my kidneys (because I'll have to sell it) in the process.
Surely there is another way. "Buy used," they say. Anyone with a brain has considered that already. The problem is that Jeep (especially Wrangler) hold their value very well. This got me thinking.
Do increased sales numbers result in lower used prices? You know, that whole supply/demand thing we learned about first semester in macro econ before we stopped going to class.
First: Wrangler's historic sales figures
A decade ago in 2008, Jeep moved 84,615 units. Paltry. Soon thereafter though, FIAT began moving into the Chrysler organization. By 2014, FIAT ate the entire Chrysler pie. They used their design prowess and ample resources to boost the company's sales to 202,000 vehicles in 2015. This year's sales look to improve on that record high. In May of 2018 alone, Jeep sold 25,102 units.
It seemed logical to me that Jeep's low production and sales numbers historically kept their resale values high. But, since production numbers have been increasing dramatically in the past half decade, could their secondary market value drop? Could this bulge in new car sales open up some savings opportunities for used car buyers like me? An intriguing question that I felt the need to investigate. Next stop: Kelley Blue Book.
All calculations for this article are done using the Wrangler 2D Sport, very good used condition from a private party.
Next: Wrangler's resale values
Fair purchase prices for used Wranglers, according to KBB, show that the average year-over-year value diminishment is about $1,600. So, if my hypothesis is correct, Wrangler values will drop in proportion to the increased production numbers. What that means is beginning 2011, when production first surpassed 100,000, we should see a average value decrease above $1600 per model year. What do we find?
A 1 year old used base-model (2017 right now), 2-door Wrangler S, in very good condition, sold privately goes for about $26,000. 2016s sell for $2,500 less. This is well above the $1,600 average depreciation. Is this the first example of increased supply diminishing values? Probably not. Values in the first three years fluctuate more than most used years due to certified pre-owned units boosting the average value over private party value. So, what we're really looking for is the values of vehicles more than 3 years old.
Finally: The verdict
This is the part when you all continue to read, but with bated breath. "I can't wait for Brian to share which model year is the best bargain!" It turns out that the best bargain Wrangler is available at most big box retailers. The Fisher Price Barbie Jeep has been a classic of the under five-year-old kid market for decades.
The real thing's used value doesn't seem to be affected by increased production numbers. Years when Jeep produced near or over 200,000 (2015, 2016, 2017) Wranglers hold their value just about as well as a decade ago when production was only 80,000. Our only hope for greater savings is that the models drop more significantly after they move out of the 3-year insulated value range. Sorry to dash your bargain-hunting dreams, but the best way to get the Jeep you've always wanted today is to save up for it. Or, buy a version of it for your preschooler.