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.