Used Toyota prices make no sense?

Posted by SpeakerReasonable610@reddit | askcarguys | View on Reddit | 39 comments

Been out of the car business for 5 or so years… mom is looking to buy a Corolla base model in cash…

Basically I’m seeing CPO’s low mileage 2021-2024 for around $20-21k… however the base model brand new one is only about 24k and that’s MSRP…

Say Toyota has a $1k loyalty rebate for being an already Toyota owner… maybe get 5-600 off MSRP…

What’s the reason to even buy this used?

You’re telling me a corolla only lost a few thousand in depreciation in 2-3 years?

What can I expect off a new corolla, I know markup is going to be minimal being it’s an entry level car… and my former GM now runs a Toyota store so I’m guessing he’ll help where he can…

But in general how does such a small price difference even make sense?

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KCpaintguy@reddit

The Toyota dealer I do some work at can’t even sell used tundras because new ones are the same price. They just send them to auction. Crazy times

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Aegean8485@reddit

It is cheaper to buy a 2023 Audi Q8 E Tron with 40000 miles still under warranty than a 2023 Toyota Corolla with 40000 miles without factory warranty.

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BuyLandcruiser@reddit

Well the market was pretty much the same 5 years ago…..

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Hersbird@reddit

Doesn't and never has to me. Toyotas you buy new or very old, not lightly used. Maybe you could find a good deal on a cosmeticly damaged one.

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FeelTall@reddit

This is know as the "Toyota tax" in the used car world. They hold their value extremely well even if their new cars aren't as bulletproof as they used to be. Still great cars though!

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SpeakerReasonable610@reddit (OP)

Yeah I get the hold the value… but if someone’s already spending 21k on a used car… why not just spend the extra 2-3k and get it brand new… especially if you’re financing, rates would be lower and payment difference would be minimal…

I know Tacomas have always had crazy resale value. But I never expected Corolla to be like that

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scream4cheese@reddit

That’s what happened to me last year when I bought a “new” used car. I didn’t do my research enough and realized a week or two later that for the price I paid, I should’ve gotten a brand new car instead.

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Substantial_Team6751@reddit

I've been trying to understand these car market dynamics for a while. I suspect that there are a lot of people that can't qualify for a used car but can get some less advantageous loan for a used car.

This is only a hunch, because I agree that it makes no sense to pay $21k for a 3 year old used Corolla when you can get a new one for $24k.

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MagnusAlbusPater@reddit

I’d say it depends on the equipment on the used vs a new one.

If you can buy a used XSE for a few thousand less than a new LE it may be worth it to get a lot more equipment.

If it’s a used base model for that price then no, not worth it at all.

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SpeakerReasonable610@reddit (OP)

Yeah she only wants the complete base… she’s coming from a 08 Corolla that doesn’t even have anti lock breaks or a single feature… she doesn’t even use Apple play or want that stuff. The tech freaks her out

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Content-Insect-8770@reddit

That's how markets work. We had the situation with Teslas for years where a 1-2 year-old model would sell ABOVE MSRP because it was a 6-month-to-a-year wait to get one. And it builds on itself. People like you looking at the used market say "Well, I'll just buy new", so new cars aren't discounted and there's waiting lists, which feeds back into supporting used market prices.

Most manufacturers learned after COVID and Tesla's example that they can make more money by producing fewer cars. Drives up the demand for used versions, which drives up selling prices/margins for new ones... Tesla, meanwhile, believed its own hype and kept increasing capacity until they ran out of demand and both new and used selling prices have cratered in the last 2-3 years.

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Huge_Consequence_721@reddit

Teslas are much better then Toyota. Not even close. Let’s see a Toyota drive itself, park itself, pick you up.

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loweexclamationpoint@reddit

If that's manufacturer's strategy, then consumers have no reason to continue to support capitalism. The grand bargain of capitalism is that it will provide consumers maximum supply of goods in return for profits.

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Substantial_Team6751@reddit

Corollas are not in hot demands. My local dealer in a podunk town of 100k people has six on the lot. They are even advertising them as specials on their web site a little below MSRP.

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dllemmr2@reddit

Can you explain how new selling prices have cratered?

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Content-Insect-8770@reddit

Sure, great question.

There are 3 main ways that Tesla has reduced selling prices:

1) Low interest Financing offers. These have run for the entire quarter in Q1 in every market around the . Previously such discounts were almost unheard of until 2024/2025 when they would be offered for 2-4 weeks at a time in certain markets. The 0.99% rate, for example, is an approximately $5k vehicle discount.

2) Introducing 'base' models. Like the recent Cybertruck 'base AWD' and the MY base, they are much lower-margin variants that represent a loss in pricing power.

3) Accepting above-market trade-ins. This one doesn't show up right away in gross margins or average-selling-price because it is hidden as eventual write-downs of used inventories. Tesla has been forced to solicit existing owners by offering trade-in values at $2-$5k above their actual market value. This loss will only be realized in the "Services and other" category [not affecting the reported auto gross margins or average selling prices] when the used vehicle is dumped on the market at its actual value.

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SpeakerReasonable610@reddit (OP)

My interpretation was Tesla dropped the new car prices which crushed used car prices at one point. Thats what I remember reading on

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poo-on-a-stick-@reddit

The wait time on a new one could be up to 6 months. Not everyone can wait that long.

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Nervous_Hurry_9920@reddit

They don't just have corollas sitting on the lot?

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poo-on-a-stick-@reddit

Sometimes. If you’re lucky, but it might not be the one you’re looking for.

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OkBenefit1731@reddit

Falsifying a tight supply is the easiest way to artificially raise prices even when demand is more or less the same as it was before the supply “shortage”. Same reason why most things that shot up in price post covid never went back down, and why it’d take a globally destructive economic crisis to get gas prices to lower significantly now that it’s started to hit 4-5 dollars nationally.

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Dank009@reddit

The new Corolla hatchback is awesome

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AskMeaboutMyCorolla@reddit

Hey! I’m right here! AMA

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jules083@reddit

That's why I drive a Ford.

A used Corolla is likely a great car. Also a used Corolla is priced just about the same as 2 Ford Focuses, a Ford Ranger, and an annual AAA membership. Lmao

Note: don't actually buy a focus unless it's a manual transmission. If it has a manual transmission jump on it, they're great cars and very inexpensive.

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ExcellentWinner7542@reddit

Don't buy used.

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potato_potahhhtoe@reddit

As someone said maybe "wait time." On the lot, there are a decent amount of new cars but for some models (not even trims), it was nearly impossible when I was looking around for my Toyota. I would have had to wait months for dealerships within a 100 mile radius of me. The reserve list for incoming cars were pretty long. Looked around for a month for one to pop up (brand new) closest to me that wasn't reserved, 3-4 hours away, and was able to reserve it. Picked it up about a month later when it got to the lot. They did all have some used ones but as you mentioned, the used prices are insane that it would make more sense to just get a new one. This was back in 2024 though, is it still the same now?

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ArgumentStrict3704@reddit

Maybe your comparing the most stripped down base new car to a used car that has packages/premium paint/distributer adds ect. Most cars dont come with nothing added.

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Superb-Meal-4473@reddit

Corollas are currently among the slowest-depreciating vehicles on the market. Data suggests a 2-year-old Corolla often retains 90% or more of its original value. CPO Premium: Dealers often price CPO units higher because they include a 7-year/100,000-mile powertrain warranty, which in some cases is longer than the remaining factory warranty on a new car. Inventory Lag: While new car inventory is recovering, many dealers still have "market adjustments" or mandatory add-on packages on new units. This keeps the "real-world" new price higher than MSRP, which in turn props up used car prices.

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Hungry-Job-3198@reddit

Yeah used Toyota prices have only been this way for years. It’s pretty shocking

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BrownSLC@reddit

So, you can save 20% on lightly used.

That’s not insignificant.

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SpeakerReasonable610@reddit (OP)

Traditionally cars lost about 1/3rd to 1/2 the value in 3 years. Lease residuals historically were in the mid 40’s to low 50’s… when I used to sell off lease cars they’d be around 15-16k when the new model was around 21k…

I’d say the 20% isn’t as significant when you factor in wear and tear, second owner, interest rates, rebates, etc…

I’m pretty sure cpo cars only need about 50% break and tire life to certify… so if breaks and tires are half way done. That’s about a $1k replacement in the next 30-40k miles… versus the new one will start from 0 wear and tear

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BrownSLC@reddit

It seems those days are over for reliable cars.

The premium for reliability has really gone up post COVID.

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Tin_Can_739@reddit

Accord, Civic, and Camry have similar prices