Like just about everything else, the cost of a new car is on the rise lately, and unfortunately, it appears as though anyone looking to purchase a used car anytime soon will also be spending more, too. The latest intelligence report from CarGurus found the average used car price has climbed back over the $30,000 mark for the first time since 2023.
In 2023, manufacturers in nearly every industry were still playing catch-up from the pandemic and from shipping issues (like the one caused by the Ever Given in 2021), moving desperate car buyers who would have likely purchased new into buying used instead. Demand increased, as did prices. Once things were a bit more stable, though, those prices came down, standing at an average of $27,171 as we reported this time last year.
That number is now $30,200, an 11% increase amounting to over $3,000 more than the average used car price a year ago, with CarGurus reporting that prices overall are running 5.1% higher year over year. The good news is that at least used car inventories are building up, but that inventory is made up of more newer-old, or “younger” used vehicles, which, of course, cost more.
What’s to blame for this, our expensive folly?
At first glance, it’s easy to blame rising prices on Trump’s tariffs and overwhelming inflation, and those certainly play a part. The tariffs have added unwanted price increases on new cars, as well as on any car part that made its way to America’s shores, and those costs were so nicely passed onto us.
However, Kelly Blue Book suggests that part of the issue stems from people holding onto their cars longer, with the average age of a car on the road standing at 12.8 years. According to KBB, there are also just not as many cars to buy or sell, thanks to automakers pulling back on production following the 2008 recession. This combination of factors has brought used car prices to sit between $15,000 and $30,000. You’d be hard-pressed to spend less than that unless you’re a mechanically inclined individual.
What’s more, as the average new car price rises, so too will used car prices. According to KBB, in just five years, the number of vehicles priced at $25,000 or less has dropped by 78%. Today, only four new models are offered at that price, compared with 36 models six years ago. But don’t worry, the number of new models over $60,000 today is 114. In 2017, that number was nearly half of that. So at least we have those high-priced new cars to look forward to on the used-car auction block.
