Buying and selling a vehicle in today’s automotive market can be a really risky move depending on what you’re buying and what you’re selling. What sells well today might be out of fashion tomorrow, and what was super expensive yesterday might be dirt cheap today. We’re seeing various brands and models under the brand umbrellas thoroughly fluctuate in ways that make it difficult to predict how or where the market will go next. One interesting case in these fluctuations is the Cadillac CT brand, specifically the CT4, CT5, and its predecessor, the CTS.
If you had been scouting models around a Cadillac dealer or online seller, you might have noticed those pricing discrepancies between certain available Cadillac vehicles on the lot. Maybe some were particularly higher than you thought, while others may have been lower than you remember. Well, it isn’t your mind playing tricks on you. The market really is going through some non-stop undulations at the moment, which has made car shopping quite tricky for some people, especially if you were in the market for a Cadillac.
Percentage Jump for the Cadillac CT4-V & CT5
One of the biggest victims of the market percentage hike for newer model year vehicles is the midsize luxury vehicle, the Cadillac CT5. Since debuting in 2019 as a 2020 model year, the CT5 has seen a consistent growth spurt in sales…when models are actually available on the lots and supply isn’t constrained. As you might have noticed from the 2021 sales reports, the CT5 saw a drastic dip in units sold, and this was obviously due to supply shortages brought about by the pandemic. 2022 saw a sharp rise in both production and sales, as the newer nameplate in the Cadillac offerings saw its best sales year to date.
The Cadillac CT4, the compact luxury sedan, was in a similar boat as the CT5. It also saw a drop in sales during 2021 and a massive uptick in 2022. In fact, it saw a significant 27.82% increase in annual year-over-year sales by the close of 2022, which is quite significant. The problem, however, is that due to supply still not evening out with demand and due to fluctuations in inflation, the manufacturers are passing on expenses to dealers, and dealers are passing those expenses on to shoppers for select models.
This has resulted in some markups taking place for specific vehicles. The 2023 model years for the CT4 and CT5, in particular, have seen significant markups according to the latest market report about markup averages. The overall good news for the entire auto market is that the averages are actually down this year to 8.8%, wherein the averages hovered around 10.2% during the summer of 2022. But averages don’t apply to exceptions, and the CT4 and CT5 are quite exceptional here.
According to the report, the 2023 CT5 has seen a 20% markup over the MSRP, while the 2023 CT4-V has seen a 21.1% markup over the MSRP. That means that dealers are looking to make big banks selling brand new model year CT4-V and CT5 models. If you were looking to buy one of those models from a Cadillac dealer, you would have to do some serious shopping around to find a good deal while the current markup percentages are as high as they are.
Don’t Count Out the Cadillac CTS
If midsize luxury is still on your car-shopping docket, you might not want to pass up the opportunity to get a Cadillac. If you’re all-in on a new CT5, you may have to be more diligent with shopping for one from a dealer who has a price on the vehicle that you’re willing to pay. Alternatively, there is still the option of going with a CTS if you want a midsize luxury sedan that also happens to be a Cadillac. The best part about it? They’re as cheap as they’ve ever been, and they’ve just been getting more affordable since the final generation before the CT5 took its place.
The interesting thing about it is that essentially any Cadillac CTS that was at least three model years old had a significantly reduced used car price. According to an older report from iSeeCars, the Cadillac CTS was the number one best bargain when it came to a used car, with a 51.4% depreciation on the MSRP. Why the major drop-off in price for the CTS? Why has it become such a bargain since 2017?
Well, the reasons for all of this are multifold. The first major reason is that the CTS is an outgoing nameplate. It was, as mentioned earlier, replaced with the CT5, and as already outlined, the CT5 is popular enough to see some significant markups on the MSRP. Now you might think that the CTS drop in price and affordable availability on the used market was all due to being replaced by the more luxurious CT5, but that wasn’t the whole story.
See back during the final generation of the CTS, it turned out that it was one of the most popular leased vehicles on dealers’ lots. In turn, the CTS became an extremely popular off-lease vehicle. In essence, lots of people would lease a CTS and then either opt to buy it or the dealer would make it available as a ready-to-sell used vehicle once the lease was up. This resulted in a lot of CTS models flooding the market as used vehicles and, in turn, being made available for very low prices in the used market. It was essentially a win-win-win for everyone involved because those who couldn’t afford to buy new were able to lease a popular vehicle like the CTS, dealers managed to make bank both on the CTS lease deals and selling the vehicles as used off-lease models, and those looking to buy a luxury midsize sedan were able to find plenty of CTS models for cheap on the used market.
Cadillac CT: Affordability vs Availability
If you’re buying a brand new CT4, CT4-V, CT5, or CT5-V from a Cadillac dealer, you will need to be aware of the potential markups on the MSRP, especially for the Cadillac CT4-V and the Cadillac CT5. Those two, in particular, are hot market items for double-digit percentage markups. Availability may vary for the CT4 through CT5 models, but they are obviously going to be more plentiful than finding specific models of a used CTS, which has been discontinued since 2019. What this means is that shoppers who find themselves looking for a 2023 model year CT may not have a problem finding one, but finding one without a huge markup could potentially become its own conundrum.
The upside to buying a used Cadillac CTS is that while stock for this particular model may be low, depending on if you opt to shop at a dealer’s lot or via a private seller, the price is almost always very low. So if you can find a used CTS, you don’t have to worry about the markup on the MSRP. Another huge benefit is that there are still plenty of off-lease CTS models available, meaning you get limited miles, great quality, and solid features from vehicles up to the 2019 model year.
So what does all of this mean for those who are interested in a Cadillac CTS, CT4, or CT5? It means there are a lot of unpredictable elements taking place in the market right now, and there are no guarantees about anything. Yes, markup percentages are at all-time highs for some models, but it doesn’t mean every model at every dealer is suffering from this problem. It does mean you will have to beware when shopping for a Cadillac CT model. Alternatively, you could shop around for a used CTS and pay significantly less, but that will likely come at the cost of the time it takes to shop around for a model you’re comfortable with buying. In any case, it’s quite apparent that all of the recent market disruptions mean that Cadillac shopping is likely more interesting than it’s ever been.