Used Cars Under $20,000 Are Getting Rare, Study Finds
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Affordable used cars are vanishing from the market and used car asking prices in the U.S. are soaring in the wake of the COVID-19 pandemic, a recent study of the pre-owned vehicle market shows.
The study and report by iSeeCars reveals that only 12.4 percent of used cars are currently priced at less than $20,000, whereas 49.3 percent of used vehicles carried a price under the $20,000 mark in 2019.
Average used car price has risen to $34,491 by summer 2023, up sharply from the 2019 average of $23,351, which itself was hardly changed from the average 2015 used car price of $22,493. One of the most expensive used models mentioned in the list, the Ram 1500 truck, costs $42,881 on average, 56.9 percent higher than its 2019 $27,324 price tag.
Not only have used car prices skyrocketed over the past few years, but the quality of those cars has declined simultaneously. Specifically, used car odometers are now carrying much higher mileage, with more than 50 percent of all used cars having 20 percent or greater mileage on them than similarly-priced pre-owned vehicles in 2019.
Karl Brauer, an executive analyst at iSeeCars, remarked that “in 2019, used car shoppers with a budget of $15,000 could afford over 20 percent of the late-model used car market. Today that budget only gets them access to 1.6 percent of the market.”
Zooming in on individual models, strong increases in used car prices between 2019 and 2023 affected a number of popular GM nameplates. Used Chevy Silverado 1500 trucks now cost $40,359, a 36.2 percent jump, while used Chevy Malibu prices surged 29.5 percent to $20,372 and the Chevy Equinox gained 26.3 percent to cost $22,685 today.
Karl Brauer noted that since 2019 a pair of “popular compact SUVs, the Honda CR-V and Toyota RAV4, increased in price 37.1 percent and 41 percent, respectively” and added that the “price increases occurred despite a doubling of the average mileage on these same used models,” from less than 50,000 miles to in excess of 100,000.
While the prices of used cars have clearly risen significantly in the past four years, Cox Automotive recently claimed the prices of pre-owned vehicles are starting a downward trend. The study also pointed to wage and salary growth outpacing inflation once again as an indicator that more people will be able to afford used cars even at higher prices.
With that said, GM Authority reported in June that Q1 2023 data shows that the recent drop in used car prices is not entirely beneficial to owners. Many purchasers with used car loans now have loans worth 125 percent of the current market value of their used vehicle, leaving them with negative equity in their used transportation.
iSeeCars used the records of 10.8 million used car sales in its research, focusing on used vehicles between one and five years old.
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Because the boneheads are peddling overpriced, underdiscounted and undercontented garbage to new buyers and they aren’t biting.
And the dealerships mark up the price even further… I love the new trick of dealers selling brand new cars with a hundred or so miles on them as “used” so they can mark up as they please without pissing off the OEM automakers… To every car salesman, dealership employee and franchise holder, please let it be known that the entire buying public views YOU and YOUR ORGANIZATION as TOTAL SCUMBAGS!
Salespeople get the blame on everything. Really??? They only follow dealership policies put in place by the dealer. Most dealers are so greedy, they don’t even pay salespeople on the additional mark ups. So direct your anger towards the correct people. The folks with their name on the sign are to blame 99% of the time.
Working in auto sales for a total of 24 years now and having done nearly every job in a dealership, I must condemn what Mayor of Realville said. Although I understand the sentiment, it’s quite wrong to pool everyone from a dealership into a bag of “total scumbags”. You are probably one of “those” customers that nobody wants to deal with and you probably get what you deserve.
So I agree with Richard. This is not every person who works at a dealership. This is a dealer owners/higher management issue. I’ve said it for years and keep saying it. The dealers are greedy and would step on their own mom’s back to make a buck. But that certainly doesn’t make the sales staff scumbags. Are there some that give the rest a bad name? Yes. But the majority of the sales people are simply trying to make a living and not a very good one at that any more.
If by “one of those” customers, you mean 99% of the buying public, than yes I am… Hmmm, where have I heard the “we were just following orders” orders excuse before?…
No. I mean you are most likely one of those who is never satisfied. Never happy. Always has an issue and wants everything for free. One of “those”.
I don’t take issue with you saying that dealers in general (owners/high ranking management) are greedy. They are. But I take issue with you tagging everyone who works at a dealership as……………and I quote TOTAL SCUMBAGS. So the next time you go to buy a vehicle, I can only hope you get what you deserve.
Yes, I’m assured to get ripped off just like everyone else who walks through the doors of any dealership. It’s a foregone conclusion, hence my comments. Exactly how are you helping your cause?
Your missing the big picture… cars are not 30% more expensive, your dollar just purchases 30% less. Direct your blame to bad government policies where it belongs.
That is pure B.S.
Getting my popcorn ready for the coming bankruptcies and social/societal fallout. These people with 125+% LTV ratios on their cars and mortgages are one paycheck away from complete disaster — and increasingly I don’t think it’s just the lower income percentile. A lot of “middle class” folks are in way over their heads as well. I see a lot of toys (boats, RVs, ATVs, etc.) around the neighborhood. It will be interesting to see how many are still around in a year or two — and if the homeowner is still in the house.
The student loan crisis and a lack of ability to pay it back should be a wild affair. NOBODY is going to give up their houses, cars, toys, and fun stuff to start making payments after three years of free money. They’ll just let their credit go to $#%! and continue to hope for a bailout.
Think I’ll go oil my bang-bang sticks just in case.
SMS: I agree with almost everything you said. This country has a spending problem and it’s not getting better. And just like me not being happy with higher grocery prices as well as other necessities being more expensive, the difference between myself and the people you refer to is that I don’t go buy all that stuff with huge payments and then complain about the grocery/necessities prices. I have zero CC debt and it’s going to stay that way. I have one car payment that is under $500 (still too much), but it’s on a 2023 Bolt and I’m now saving more than $250/month on gas. I just laugh when I hear people complaining about the price of food or gas while puling a brand new jet ski behind their $60,000 SUV. I have zero empathy for them.
I just turned 64 and don’t own a penny to anyone. No mortgage, no vehicle payments, and no CC debt. I buy everything with my GM Mastercard and pay it off every month. I buy a new vehicle every 5 years with cash and keep the old ones so I have three on hand all the time. My newest is a 2019 Equinox Premier which means I am due to replace the 09 Pontiac G6 next year. It perfect timing because my 15 year old granddaughter has been eyeing it. It has 99k miles on it and has been a great car and I will miss it but at least it will stay in the family. I’ll tune it, do brakes, tires, oil, and battery first so she’ll be safe. Hopefully she takes care of it like I have. Then I get to order the new Silverado!
Smart! Many of us learned that valuable lesson from our parents. If you can’t afford it, you don’t buy it!
Yes sir!
Liberal elites have got you where they want you, if you cant drop 75k on wheels ride on an electric bus.
Not me! ICE forever!
You’re a fool! This is caused by inability to manage your own spending habits.
Wow, times have changed. My daily driver is a leftover 2012 Silverado WT that I bought new in May of 2013. With discounts and rebates I wrote the check for $15,959 total with taxes, destination, and all fees drive away price. It sounds like my next new one will be two and a half times that much, maybe more if I step up to an LT. The 2012 just turned 81k miles and looks and runs like new so no hurry to replace it, but the checkbook is ready.
Just wait until China decides to stop buying U.S. debt. That’s when the poop will hit the propeller! We need a long term solution to our debt problem. But with potential legislative changes every two years, the chances of solving the problem are zero. The parallels with our economy/government and that of ancient Rome are astounding. And we know how that ended for them.
Buy gold and silver
Uh Jan…The Roman Empire lasted 1229 years.
With lots empty for two years of Covid, new car prices, and the the gov’t forcing EV’s, it’s supply and demand. I got a very dented 180k mi. Elantra for daughter for
$6k 18 months ago. Great running car. Fingers crossed, as she has wrecked many.