The Average Price of a Used Car Is Now $27,500: Dry Your Tears and Empty Your Wallet

  • Used car prices continue to rise, may pass $27,500
  • Supply simply cannot meet demand in the auto market
  • Tjankfully, car inventories across the globe are slowly rising

To the surprise of absolutely no one, used car prices are on the rise. They’re not just on the rise, like gas prices, they’re continuing to grow. Recently, the average price of a gently cared-for (or not) ride has topped a staggering number: $27,500. It’s not great, and now it’s time to talk about why both new car prices, and used ones, are on the rise.

What is a good price to pay for a used car?

An aerial shot of a used car lot, shown full despite the rise in used and new car prices
A rare site: a full used car lot | Valery Sharifulin via Getty Images

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Apparently, the best price to pay for a used ride right now is whatever you can get it for. Right now, that average price is more than a new Honda Civic. Car and Driver’s report on the matter covers data gathered by Hearst’s Black Book company (they do auto market analysis). Black Book’s data covers both independent dealers and franchises, totaling almost 95% of the data available for used models right now.

Of course, the biggest (and most obvious) culprit is that supply is greater than demand right now. Used car prices, as well as new car prices, are drastically up because new cars simply can’t be made fast enough. That’s largely due to the semiconductor shortage. Semiconductors help many of the electronics in new cars function, and right now, we can’t make enough of the tiny silicon chips.

Used car prices are way up right now

A Toyota dealer lot, full of used cars in a photo taken before the rise in used car prices
Full lots are a thing of the past, for now | Steven Miric via Getty Images

We also checked out KBB’s report on the current auto market trouble. Kelley Blue Book had similar findings to Black Book. They noted that inventory for any vehicle is 15% lower than this time last year, just months before we all started feeling the effects of the semiconductor shortage. Then, of course, there’s the demand side of this super messed-up equation we find ourselves in.

Thankfully, vaccines spurred a boost in the economy that pretty much every analyst and $TSLA holder from LA to New York saw coming. The downside of that recovery is that a lot of people were left with money to spend. Those who didn’t spend it on rising gas prices started snapping up used cars, and new ones too. This side of the autos market supply and demand equation is why we have started seeing massive dealer markups. They know someone is going to come along and pay $100k+ for a Honda Civic Type R.

Is it cheaper to buy used?

A used car lot in California taken before the rise in used car prices
A used auto dealer | Justin Sullivan via Getty Images

So, right now at least, it’s probably not cheaper to buy used. However, that depends on your budget. If you’ve only got $20,000 to spend on a car, it’s best to be patient and try your luck on the used market. However, if you’re sitting right on that $30,000 line between the average price of a used car and a new one, you might have some more options. Thankfully, KBB says inventory across the board is slowly rising. Hopefully, we can all stop watching used Tahoes sell for five figures on Bring a Trailer soon.

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