Used Car Prices Reach Record Highs

The used car market has undergone a fundamental repricing, with a significant drop in availability at the lower end of the price spectrum. According to Edmunds, the average price for a 3-year-old used car hit a record $32,461 in the second quarter.

In 2019, cars priced under $20,000 accounted for 55% of all used car sales. Today, that share has fallen to 32%. Conversely, the proportion of vehicles sold for over $50,000 has increased from 2% to 8%.

On average, used car prices have risen 4% this year and 15% since 2021. A buyer with a budget between $10,000 and $15,000 can now expect to purchase a 9-year-old vehicle with 98,222 miles. In 2019, the same budget afforded a 5-year-old car with only 40,000 miles.

Vehicle brands continue to influence value. For $15,000-$20,000, buyers might find a relatively new Kia or Nissan with around 50,000 miles. For the same price, a Subaru, Toyota, or Honda would be roughly twice as old with 25,000 to 35,000 more miles.

The report also points to broader inflationary pressures in the economy, with high prices reflecting trends across various sectors. The improvement of underlying inflation trends remains uncertain.