Used car prices may have fallen from their record highs, but your money still doesn’t go nearly as far as before when you visit a used car lot.
A new study from automotive marketplace iSeeCars.com found $23,000 could purchase a three-year-old used car in 2019, the year before the pandemic. But today, $23,000 doesn’t even buy a six-year-old used car in good condition.
The study’s authors call it a “hangover” from the COVID-19 pandemic, when supply chain issues vastly reduced the supply of new cars and trucks, sending used car prices to record highs. While used car prices have fallen for three straight months, they apparently still have a long way to go.
Researchers at iSeeCars.com analyzed over 21 million used cars sold in 2019 and 2023 and found that the average age of used cars sold increased from 4.8 years to 6.1 years, while the average price across all ages increased 33 percent, from $20,398 to $27,133.
“Plant shutdowns and limited new car production during the pandemic is still playing havoc with the used car market,” said iSeeCars Executive Analyst Karl Brauer. “With 28% fewer one- to three-year-old used cars today compared to 2019, today’s buyers have to shop 6-year-old – or older – cars to find a comparably priced vehicle.”
Not as many three-year-old cars
Not long ago there were plenty of three-year-old used cars on lots, mainly because that’s the typical length of a new car lease. However, a decline in auto leases has reduced the number of three-year-old cars and trucks hitting the used car market.
“The impact of restricted new car production during the pandemic has come home to roost in the used car market,” said Brauer. “With one- to three-year-old used car supply down between 20% and 45%, buyers that previously shopped for late model year used cars now have to spend much more or consider much older vehicles.”
And now we have an auto workers strike that, if lengthy, will sharply reduce the number of new cars available for purchase, sending more consumers to the used car market. An increase in demand could send used car prices back up again.
According to iSeeCars.com, the average price of a three-year-old used car in 2019 was $23,048. Today, the average price is $32,493. To purchase a vehicle for less than $23,000, buyers have to shop for 2016 models, according to the study.