How Used Market Gone Insane? Mazda Trade-Up Timing?

Jazee

I've got 7 months left on my 19 CX-5 GT Lease.  I was going to upgrade and buy a used 2020 Signature at the end of a lease to avoid the depreciation hit.  I'm a "Car Guy" this is my 28th car over 36 years (typically owned 2 cars at a time), 2nd lease. The only other lease I did was on an Acura TL-S Sedan and ended up buying it at the end of the lease, immediately listed it on Auto Trader and pocketed $3,500 profit. This time around I only did the Lease to keep the payments down as my credit took a hit after divorce so a purchase, the payments were just a little too high to stomach plus you save on sales tax is you don't purchase the car at the end anyway.  My credit is 120 higher no than it was 2.5 years ago (750 versus 630).

I started doing a little research recently and my 19 GT in mint condition (inside and out) with only 20,800 miles (I work from home, even pre-COVID) dealers are asking $500 under the price I paid new (which was $250 over invoice.)  I know typically the Dealers will advertise a high-ball price on their used cards and will come down 5-10%.  But it seems post-COVID the used market prices have gone completely INSANE! Am I right in what I'm seeing?

So then I started thinking, why not buy the car (current buy out price is $24,400) now, and trade it in on a 2021 Reserve when I *should* be able to get a pretty penny on the trade price?  The question though is are they not dealing on the new price due to chip shortage so it's all amounts to a wash basically and I'm better off waiting until the end of the year when things have cooled down?  I doubt there will be any end of model year deals on the 2021's though if there's a shortage to begin with and maybe the used market will be cooled down in 7 months so I can pickup a 2020 used for a reasonable price but my gut is telling me that may not be the case.  Plus I really need a larger screen.  My long vision is great but I'm having a hard time sometimes reading my Android Auto Screen on my 19.

Wondering what other people's recent experience/observations/recommendations are?

kyfdx

You don't have to buy your lease out to trade it on another car.

Michaell

Jazee said:

I've got 7 months left on my 19 CX-5 GT Lease.  I was going to upgrade and buy a used 2020 Signature at the end of a lease to avoid the depreciation hit.  I'm a "Car Guy" this is my 28th car over 36 years (typically owned 2 cars at a time), 2nd lease. The only other lease I did was on an Acura TL-S Sedan and ended up buying it at the end of the lease, immediately listed it on Auto Trader and pocketed $3,500 profit. This time around I only did the Lease to keep the payments down as my credit took a hit after divorce so a purchase, the payments were just a little too high to stomach plus you save on sales tax is you don't purchase the car at the end anyway.  My credit is 120 higher no than it was 2.5 years ago (750 versus 630).

I started doing a little research recently and my 19 GT in mint condition (inside and out) with only 20,800 miles (I work from home, even pre-COVID) dealers are asking $500 under the price I paid new (which was $250 over invoice.)  I know typically the Dealers will advertise a high-ball price on their used cards and will come down 5-10%.  But it seems post-COVID the used market prices have gone completely INSANE! Am I right in what I'm seeing?

So then I started thinking, why not buy the car (current buy out price is $24,400) now, and trade it in on a 2021 Reserve when I *should* be able to get a pretty penny on the trade price?  The question though is are they not dealing on the new price due to chip shortage so it's all amounts to a wash basically and I'm better off waiting until the end of the year when things have cooled down?  I doubt there will be any end of model year deals on the 2021's though if there's a shortage to begin with and maybe the used market will be cooled down in 7 months so I can pickup a 2020 used for a reasonable price but my gut is telling me that may not be the case.  Plus I really need a larger screen.  My long vision is great but I'm having a hard time sometimes reading my Android Auto Screen on my 19.

Wondering what other people's recent experience/observations/recommendations are?

Right now, the used car market is absolutely crazy.

You should get quotes from Carvana, Vroom and CarMax on your current Mazda - I think you'd be surprised at how much equity you have in it.

The problem is, the retail side is very expensive, too. So, when you try to use that equity to buy your next vehicle, prices will be expensive.

If you want to buy out your current lease, that makes sense, but nobody knows how long this overheated market will last.