It’s no secret the price of a new used vehicle has soared in the past few years, but exactly how high that figure has risen should surprise the auto industry and the consumers who buy its products.
From 2019 to 2023, U.S. used cars, trucks, and SUVs have triggered a sea-change in buying behavior, and it’s not a move trending to the benefit of auto consumers.
A case in point.
2023 late-model used car shoppers “have to buy cars more than twice as old as what the same money bought them in 2019”, according to a new study by iSeeCars.com.
For example, $23,000 in cash was good enough to land a 3-year-old used car in 2019. Four years later, “$23,000 won’t even buy a 6-year-old car,” iSeeCars.com reports.
The numbers only get worse for American used car buyers.
In 2019 $14,500 to $16,500 could easily land a smaller vehicle like a 3-year-old Honda Civic or Toyota Corolla. That’s not the case in 2023, as those cash figures are only enough to purchase an 8-year-old Civic or Corolla.
Or take a 3-year-old Volkswagen Golf, which retailed for about $14,876 in 2019. In 2023, however, $15,000 gets buyers into an 8-year-old Golf, with that much more wear and tear on the vehicle, the study noted.
Besides high inflation, there’s another primary factor for the diluted value of American used vehicles since 2019. During the pandemic and resulting lockdowns, “limited production of new cars in 2020-2022 is reflected in the scarce availability of 1- to 3-year-old used cars,” the iSeeCars study reported.
That slowdown scenario hasn’t improved much in 2023.
“Plant shutdowns and limited new car production during the pandemic are still playing havoc with the used car market,” said iSeeCars’ executive analyst Karl Brauer. “With 28 percent fewer 1- to 3-year-old used cars today compared to 2019, today’s buyers have to shop 6-year-old – or older – cars to find a comparably priced vehicle.”
With new car manufacturing in slow growth mode and global supply chains still recovering, used car customers have two choices. Either accept the new reality in the used car market and overpay for an older model or sit tight and wait things out until supply chains strengthen and new models start hitting dealerships.
“The impact of restricted new car production during the pandemic has come home to roost in the used car market,” said Brauer. “With 1- to 3-year-old used car supply down between 20%-and- 45%, buyers that previously shopped for late model year used cars now have to spend much more or consider much older vehicles.”