Are the Days of Good Used Cars for Under $20,000 Gone?
Once upon a time, car buyers were able to purchase used vehicles for less than $20,000. Now, if you’re looking for a used car, you’re going to have to pay a minimum of $20,000. In most cases, the price will be much higher than this. So how long will this go on, and is there hope in sight?
It’s getting hard to find a used car for under $20,000
In terms of auto sales, we had it good in 2019. Things weren’t exactly cheap, but an individual with a decent-paying job could go out and buy a reliable used car for less than $20,000. Those days are long gone.
For anyone who needs a used car now, it’s no easy task. For starters, there simply aren’t that many for sale. Anyone who has a used car is not willing to part with it, especially if they’ve paid it off.
Buying new isn’t exactly an option either, as the prices for new cars have increased. The supply chain issues are also leaving many people who can afford a new car on a waiting list that could last anywhere from one to two years before they actually get their vehicle. This forces them to either buy something they aren’t happy with or join the hunt for the elusive used car.
Another factor is that many used cars for sale now have twice as many miles on them as they did back in 2019. It’s not uncommon to hear someone stating they bought a used car with only 60,000 miles on it, and they’re pleased with the purchase.
Some people are even snapping up vehicles with over 100,000 miles because there is nothing else available. In 2019, this would have been unheard of, but the market has drastically evolved in just four years’ time.
iSeeCars has some interesting statistics that show how high prices have risen. For starters, nearly half of the used cars sold in 2019 were available for less than $20,000. Now this has dropped to 12.4%.
Half of the used Toyota RAV4s and Honda CR-Vs sold were going for less than $20,000. Now, it’s only two percent. Even more alarming than this is the fact that the average price for a used vehicle is now 47.7% higher than it was pre-pandemic.
When you break this down a little further, you’ll see that used car prices were only $22,493 in 2015. In 2019, this price increased to $23,351. In 2023, most people are paying $34,491 for used cars with low mileage. This is incredible when you consider that many people couldn’t even afford a car that cost over $30,000 just four years ago. Yet, in spite of the economy being worse, many people are now forced to pay this much or forego having a car.
Will the prices of used cars ever go down?
They already are. While the prices remain high, many shoppers are now able to purchase used cars for a cheaper rate. This is especially true for used electric vehicles.
We recently reported that many used EVs are on the market, and the prices have plummeted. There are several reasons for this, such as people having range anxiety. We’ve also learned that the batteries aren’t exactly as green as we once believed, due to lithium mining. For anyone who is truly serious about going green, it’s hard to ignore the fact that increased mining is not saving the environment.
Regardless, prices will eventually fall. The main issue many used car buyers now face is increased interest rates, which may take time to fall.