It’s no secret that used car prices have increased significantly over the past several years. According to the iSeeCars Car Affordability Index, used car affordability dropped 26.7% from August 2019 to August 2022. This means used car prices increased faster than real wages. As a result, buyers are taking out longer loans and making higher payments to buy vehicles they want.
The iSeeCars Car Affordability index compares median household income to an idealized car financing income. This comparison uses historical income and used car price data to determine affordability. If the price for a specific model increases more than real income, the index shows that difference as a percentage.
According to the index, popular models like the Honda Accord, Toyota Prius, Toyota Avalon, Nissan Maxima, and Ford Mustang have increased as much as 37%, putting them out of reach for some consumers. We’ll take a look at these cars, including their affordability scores and price increases as of August 2022.
3-Year-Old Car Average Price: $35,137 | Percent Above Affordability: 37.6%
The Toyota Avalon is one of the best large sedans on the market. It offers a roomy, comfortable interior, a smooth ride, decent gas mileage, and good performance. It’s also equipped with features normally found in higher-end luxury cars. It does everything well, from commuting to long road trips, and typically gets high marks in reviews and comparisons.
Unfortunately, it also gets high marks for its price. The average price for a used, three-year-old Avalon is $35,137, an increase of $13,181, and is 37.6% less affordable than a similar vehicle from three years ago.
3-Year-Old Car Average Price: $33,500 | Percent Above Affordability: 31.2%
Few cars offer high performance in an affordable package like the Ford Mustang. The original pony car is an icon and has been going strong for almost 60 years. Buyers can choose between a coupe or convertible, a pair of potent engines, and a long list of options. It remains a popular choice for people from all walks of life.
Its popularity is also reflected in its price tag, which is 31.2% less affordable than three years ago. The average price of a used three-year-old Mustang is $33,500. However, limited edition vehicles like the Bullitt will set you back a bit more.
3-Year-Old Car Average Price: $32,090 | Percent Above Affordability: 25.6%
The Prius is Toyota’s long-running hybrid model. It’s also the poster car for environmentalists and people who prize fuel economy above everything else. But the Prius is not a penalty box on wheels. It provides a surprising amount of room, comfort, and features in a highly efficient package.
The Prius is also highly efficient at retaining its value which is just… high. A three-year-old Prius will cost its buyer an average of $32,090. It may make filling up at the pump more affordable, but in reality, the Prius is 25.6% less affordable than it was in 2019.
3-Year-Old Car Average Price: $30,547 | Percent Above Affordability: 19.6%
Nissan’s Maxima nameplate dates almost 40 years, when Datsun rebranded itself as Nissan in the U.S. market. It’s made a name for itself as a sedan with responsive power and good road manners. It’s not quite the “four-door sports car” Nissan claims, but it won’t embarrass you on a winding road either.
At $30,547 for an average three-year-old Maxima, it’s neither cheap nor overly expensive. But it is 19.6% less affordable than it was three years ago.
3-Year-Old Car Average Price: $28,847 | Percent Above Affordability: 12.9%
As one of the most popular sedans, the Honda Accord delivers refinement and value. It’s also quiet, comfortable, and loaded with useful technology and advanced driver aids. Performance-wise, it’s surprisingly capable, offering good acceleration and very capable handling without sacrificing ride quality.
Of the vehicles on this list, it’s also the one you’d sacrifice the least to own. It’s 12.9% less affordable than in 2019 but is still a better value than many other vehicles. Honda Accords have always had high resale values, and the $28,847 average price reflects that while still being somewhat more affordable for most people than a Toyota Avalon or Nissan Maxima.
Is now a bad time to buy a used car?
The past two years have been a historically bad time to buy a car. Supply chain shortages have led to new vehicle inventories drying up. The lack of new cars makes used cars more appealing to buyers, many of whom would never consider a used car under most circumstances.
All of these factors have driven up used car prices, so buyers are faced with some hard choices. Either buy a newer used car and go longer on the loan or higher on the payment or try to finance an older sedan or one with higher mileage. Buying a smaller, more basically equipped vehicle, is also an option. But this is the new reality for car shoppers, and it doesn’t look like prices will decline back in line with the iSeeCars Affordability Index anytime soon.