Cash-strapped used car buyers can finally breathe easier

Whether you like cars or not, it’s undeniable that America is built for the automobile.

According to the latest edition of the American Automobile Association (AAA) American Driving Survey, 95.3% of US residents aged 16 and older drove at least occasionally in 2023.

At the same time, the average American driver spent at least 60.7 minutes behind the wheel and drove 47.1 miles per day last year.

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But even though we drive a lot, cars are expensive and seem as unattainable as ever.

According to the most recent data available from Cox Automotive, the average list price for a new car in the United States in August 2024 is $46,841, with average transactions that month coming in at $47,870.

Although Cox points out that a third of the models on the market have list prices under $46,000, the high prices of new cars have many buyers looking for used examples to get a great deal.

Fortunately, new data shows that relief is coming for used car buyers looking to get something “new to them.”

Used Ford vehicles for sale at a dealership in Colma, California, USA

Bloomberg/Getty Images

Late Model Blues

According to a new study by iSeeCars, the average price of a relatively “new-ish” car; cars that are one to five years old, fell 4.7 percent from 2023 to $32,672.

While the figure is significantly lower than the nearly $47,000 average for a new car, the latest price is still 40% higher than the 2019 average of $23,314. However, iSeeCars executive analyst Karl Brauer pointed out that the availability of much cheaper cars is contributing to lower prices.

“After years of rising used car prices, we’ve finally seen prices come down over the past year,” Brauer said.

“While $20,000 would buy about half of the 1- to 5-year used car market in 2019, that number has dropped to just 12.7% in 2023. Now it’s growing again at 16.5% from used cars priced under $20,000. in 2024.”

Additionally, their findings show that market share has increased in all segments of used cars priced below $30,000, while the share of cars priced above $30,000 has decreased.

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The iSeeCars data also reveals that the drop in used car prices has been accompanied by an increase in “new” used cars available on the market.

A common indicator of a car’s mechanical condition is its mileage, and researchers have found that buyers are picking up cars with fewer miles than before, even in lower-priced used models.

They found that the average mileage of used cars selling between $15,000 and $20,000 is 9.2 percent lower, while cars under $10,000 have 9.6 percent fewer miles.

“In a complete reversal from the COVID era, where used car buyers had to pay more money for cars with more miles on them, today’s used car buyers benefit not only from lower prices, but lower miles,” Brauer said. “They get a less used car at a better price.”

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Overall, analysts at iSeeCars see the used market returning from its conditions during and shortly after the COVID-19 pandemic, as limited supply and high demand were the huge factors behind the inflated price of used cars.

“The situation is slowly moderating, as reflected in today’s lower prices and reduced mileage on used cars 1 to 5 years old,” Brauer said.

“This represents increasing value for today’s buyers, especially when combined with falling interest rates. Used car buyers who have been waiting for better affordability are finally being rewarded for their patience.”

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