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Used Car Sales Jump As New-Car Prices Skyrocket

The average new car for Americans has become more expensive, and that fact is pushing more consumers to used-car lots rather than new-car showrooms.

The Wall Street Journal reported last Monday that the price gap between a new car and a used car reached it’s widest gap in five years. Yet, demand for vehicles, in general, has remained fairly stable. A plethora of off-lease crossovers, SUVs and trucks has only helped the used-car market gain traction this year as well.

The price gap comes as Americans set a new record for the average price paid for a new vehicle: $36,848 in December 2017. That figure actually shrunk to $35,825 in the second quarter of 2018. Both figures are a stark contrast to the average one-to-three-year-old vehicle. Shoppers perusing used car lots will face prices of $22,489 on average, which is over $13,000 less than a new car purchase. And that’s a major differentiator as consumers think more in terms of “what’s the monthly payment” than “what’s the actual price of the car.”

Chevrolet Silverado at dealer

“When people see the price has gone up, it is sticker shock, especially when people only buy a car every five to six years,” said Brian Allan, a senior director at Galpin Motors chain of dealerships. He added he’s seen more buyers leave with a pre-owned car rather than a new vehicle more often as MSRPs climb.

Even better for used-car shoppers is the bountiful amount of technology found in them. Even a three-year-old vehicle will still house some of today’s modern conveniences such as Bluetooth, hands-free capability, heated seats and more.

Cadillac-New-Dealer-Featured

But, the industry could be further skewed as automakers work to roll out auto subscriptions. Rather than leasing or purchasing a car, subscriptions offer consumers flexibility and no long-term agreements. Cadillac was first with Book by Cadillac, but GM has also filed a trademark for “DriveScription.”

Former GM Authority staff writer.

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Comments

  1. The used car mix still has a higher percentage of sedans versus crossovers, suv and pickups. Those used sedans still carry a greater discount, which lowers the average used vehicle pricing versus new vehicles.

    Reply
  2. The rich just gave themselves trickle up tax cuts and, for some reason, people can’t afford cars. Maybe the rich needs more tax cuts?

    Reply
  3. what does the auto industry expect ! price’s keep rising but real wage’s don’t. just look at trucks, the price is ridicules I’ve bought 9 new trucks and 7 new cars since the early 80’s and my current 18 model chevy will probably be my last new one I just cant justify spending over 40 grand for a truck

    Reply
  4. This pricing has gotten out of control. The public needs an wants cars with a few good features, a/c, auto, cruise, etc but we need them at about a $14K to $16K price range. A Chevy Trax should be selling form about $17K … not $22K+. And trucks, we need the same pricing there for a regular cab work truck. This is opening the door for more foreign interest. Mahindra has suvs an trucks … and they might be thinking abut coming into the US market with a plain truck that is in the $17K to $18K price range.

    Reply

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