Average Used Car Price Exceeds $27,500
The last few years have been interesting for the automotive market. A global pandemic has drastically reduced demand, only for automakers to get caught up in a rapid rebound, leaving them short of fresh produce. New cars are in short supply on the lot, and used cars seem to be drying up as well, driving up prices across the board. Prices hit new highs, with Car and driver reporting that the average used car price has now climbed to $27,500, according to black book The data.
Figures are compiled from a variety of sources, taking into account franchise and independent dealerships, and covering 95% of used vehicles on sale. Analysis by black book previously showed that the average selling price of used cars topped $27,000 last month, rising another $500 in December.
It seems like a classic tale of supply and demand. There just aren’t as many used cars on sale, with black book peg registration numbers as being down about 16% from the start of this year.
Others tell the same story, with Kelley’s Blue Book reporting that used car inventories are 15% lower than the same period last year. These numbers are based on how long it would take dealers to run out of stock if they stopped receiving more used cars. The figure stood at 44 days at the end of November, although this was up from 41 days recorded a month earlier, indicating a slight increase in the supply of used vehicles.
Kelley’s Blue Book also notes that used cars under $10,000 are the hardest to find, putting a lot of pressure on the bottom of the market. Meanwhile, used cars over $25,000 are the most readily available.
One theory on this is that due to the lack of new cars on sale, dealerships are getting fewer trade-ins to sell on the used market. Alternatively, it could be that without as many new vehicles to buy, people are turning to the used market instead. This is particularly the case for certain sought-after models, the new Ford Bronco being a prime example. It’s nearly impossible to get a new one from Ford right now, leading one owner to attempt to return his truck for over $100,000 on eBay.
On the general price increase, black book states that “In the fourth quarter, retail listing prices rose steadily week over week and the retail listing price index is now about 35% above where we started the year” , adding that “the scarcity of new and used inventory in the market is fueling these steady increases.”
So it seems that until automakers can build enough new cars to meet demand, prices will remain high for both new and used vehicles. It is sure that it is a difficult time to buy a car.
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