The world of automotive enthusiasts and everyday commuters alike has been experiencing some significant changes in recent years. While the allure of brand-new cars remains strong, the reality for many Americans is that buying a used vehicle has become a considerably more expensive endeavor compared to the prices we saw back in 2019. This shift in the used car market has been revealed in a recent study by iSeeCars, shedding light on the evolving landscape of car ownership.
In the realm of automobiles, new cars always bring a sense of excitement. They introduce fresh technologies, enhanced powertrains, improved safety features, innovative designs, and much more, all aimed at enticing prospective buyers. Despite the appeal of these new offerings, it’s worth noting that the majority of Americans tend to opt for used cars, making the shifts in the pre-owned vehicle market all the more relevant. We even recently reported on how we currently have the least affordable car market in modern history.
The iSeeCars study has uncovered a striking 33 percent increase in the average prices that used car buyers are shelling out today compared to just a few years ago in 2019. In addition to higher price tags, the study also highlights a noticeable trend toward older vehicles being purchased, with the average age of used cars increasing from 4.8 years in 2019 to 6.1 years today. This shift is further exemplified by the fact that what used to buy a three-year-old used car in 2019 for $23,000 would now only get you a six-year-old model, requiring an additional expenditure of $24,210 to secure the same transaction.
One of the significant contributing factors to this surge in used car prices is the dwindling supply of vehicles manufactured in the last three years. The disruption caused by the COVID-19 pandemic in 2020 had a domino effect on the automotive industry, leading to production constraints, bottlenecks in supply chains, and reduced production capacities in subsequent years. The study reveals that the market for 1- to 3-year-old used cars has shrunk by 28 percent since 2019, resulting in older cars gaining a larger market share.
This scarcity of recent used cars has led to a noticeable escalation in prices across the board. For instance, one-year-old used cars are now a staggering 67 percent more expensive than they were in 2019, averaging at $46,403 compared to the previous $27,793. Prices for two- and three-year-old vehicles have surged by 57.7 and 41 percent, respectively, with costs rising from $23,886 and $23,048 to $37,403 and $32,493.
|Change in Average Price of Used Cars by Age: 2019 to 2023 – iSeeCars Study|
|Age of Cars (Years)||Average Price 2019||Average Price 2023||% Change in Average Price, 2019-2023|
Even six-year-old cars haven’t been spared from this price surge, witnessing a 53.4 percent increase to an average of $24,210. Cars that are a decade old or older have also experienced significant price hikes, with ten-year-old vehicles commanding prices that are 38.9 percent higher, rising from $10,728 to nearly $15,000 on average. Even an 11-year-old car today carries a price tag of over $11,000 on average. Moreover, there’s only one new car that costs under $20K and it is to be discontinued.
The study delves further into the specifics, examining how the prices of individual car models have transformed. For instance, in 2019, a three-year-old Chevrolet Spark was available for an average price of $9,878. Fast forward to 2023, and you’ll find that for nearly the same amount, approximately $9,692, you’d be looking at a nine-year-old Chevy Spark. Similarly, a three-year-old Ford Mustang, which was priced at $23,584 in 2019, has now aged to an eight-year-old model and commands a slightly higher price of $23,755 in 2023.
These trends in the used car market underscore the far-reaching impacts of events like the pandemic on various industries, with the automotive sector experiencing ripple effects that have translated into higher costs and a shifting landscape for car buyers. As prospective buyers weigh their options, the decision to opt for a new or used vehicle is becoming increasingly complex, influenced not only by personal preferences but also by economic factors beyond their control.