Take a fresh look at your lifestyle.

: Used cars for less than $20,000 have ‘nearly vanished,’ study says

Used cars are slightly cheaper these days, but prices remain nearly 50% higher than in 2019 and people have fewer options than ever before of scoring anything for less than $20,000.

Analysts at iSeeCars.com said Tuesday they analyzed prices of about 11 million used vehicles up to 5 years old and found that cars selling for under $20,000 made up about 12% of the used-car market this year, from a 49% slice of the market in 2019.

“Among the pandemic’s many casualties is the affordable used car, which has nearly vanished from the used-car marketplace,” iSeeCars analyst Karl Brauer said.

“In 2019, used-car shoppers with a budget of $15,000 could afford over 20% of the late-model used car market. Today that budget only gets them access to 1.6% of the market.”

Moreover, people might get stuck with a car with many more miles on it. “Used-car shoppers are now paying nearly 50% more money for cars that are 20% more used,” Brauer said.

Within that under-$20,000 price range, the average used-car’s mileage rose 46% to 63,457 miles this year, from 43,541 in 2019. Across all price points, more than half of cars sold in 2023 have at least 20% more mileage than similarly priced cars in 2019, iSeeCars said.

Used-car prices shot up during the pandemic as many people found themselves in need of new wheels because they were avoiding public transportation, and had moved farther from their offices, among other reasons.

At the same time, the pandemic also wreaked havoc with supplies of chips and auto parts, which cut down new-vehicle inventories and pushed prices higher amid the heightened demand. Priced out of new cars, many who previously considered new cars only turned to the used-vehicle market, contributing to the jump in demand — and prices.

On Monday, Cox Automotive said that wholesale used-vehicle prices fell 1.6% in July from June, and their Manheim Used Vehicle Value Index was down 11.6% from a year ago.

The July drop, however, comes after 22 straight months of double-digit increases from July 2020 to April 2022, and just six double-digit declines since October. The index, Cox Automotive said, it’s back at the same value as seen in April 2021. Moreover, the downdraft might not continue.

“Used retail inventory continues to rebuild, but with used retail sales also showing some summer strength, we do not foresee wholesale price declines of serious import through December,” said Chris Frey, a senior manager of economic and industry insights at Cox.

Cox estimated that used-car retail sales are down only 0.5% in July compared to last year, and that the average retail listing price for a used vehicle moved 1.8% lower over the last four weeks.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More