The vehicle market is out of control, and car shoppers are feeling it. It is not just new cars, though. Used car buyers are spending a lot more money on preowned vehicles that normally would have been a cheap option. Unfortunately, on average, shoppers are parting with an extra $10,000 to cover swollen used car prices.
Are used car prices rising?
Used car prices are high but not rising by much; the average used car price is $33,341, $172 below the March high. That marks a 0.5% month-over-month rise in average pricing. Those numbers are courtesy of CoPilot research focused on their “Return to Normal Index.” CoPilot’s index measures the difference between current used car prices and the cost today, following the market volatility of the last two years.
Why are used car prices so high?
Used car prices are high due mainly to inventory shortages and strong demand. Specifically, when consumers want preowned cars that dealerships don’t possess, the prices skyrocket. Also, the used car market is feeling the squeeze of the compromised new car sales landscape. Supply chain follies and material shortages have compromised the inventory of new cars, spilling over to the used car supply.
How much are shoppers spending on used cars?
Although used car prices differ significantly by the age of the vehicle, the percentages are consistent. For instance, CoPilot reports that one to three-year-old cars can cost an extra $13,145 on average over “normal.” Furthermore, vehicles from the model year 2015 to 2018 can fetch an additional $9,086 on average. Across the board, consumers are spending around $10,000 more on cars newer than seven years old.
On average, consumers are spending an extra 43% to 45% on used car prices over what would have been average pricing. According to CoPilot’s research, the highest increase is in vehicles one to three years old. Consumers can expect to spend an extra 45% on preowned vehicles from that timeframe.
Which used cars are the cheapest?
Although they have experienced a price spike as well, cars that are older than eight years cost the least. Specifically, vehicles that are eight to thirteen years old demand an extra $5,416 on average. That puts the average car from that period at 43% over normal prices.
If you want to shop for the type of car demanding the least money, you’ll have to look at SUVs. As surprising as that might sound, CoPilot reports that used SUVs rose only 29% over normal pricing. Furthermore, used pickup trucks rose only 32% over what would have been normal pricing. That’s relatively modest compared to the 57% for coupes and 55% for convertibles.
Should you avoid buying a car?
While prices may seem daunting, abstaining from a car purchase is often unavoidable for many Americans. If that’s your situation, shopping for a cheap, reliable car is still very much an option. Unfortunately, though, the used car market is feeling the squeeze of the new car market. So if you need another car, a sensible and dependable vehicle like a Honda Civic or Toyota Corolla is an excellent choice for car shoppers.
Still, if you can wait, the market might normalize. Scroll down to the following article to read more about cheap used cars!