Used Lots Getting the Business

Used vehicles are in high demand, and buying them is coming at a significantly higher price than it used to.

July used sales, which typically wane from June, rose by nearly a percentage point to 1.4 million units, Cox Automotive reported.

That’s despite the average listing price being up 6% year-over-year to a hair over $27,000, Cox said. It was the second straight month of prices surpassing $27,000, the first such stretch in three years.

Used supply was flat from June at 46 days, according to Cox data. But the most affordable segment of under $15,000, seeing particularly brisk sales, was down 20% year-over-year to 32 days’ supply and just 16% of used inventory.

Many mass-market consumers have flocked to used lots as both new- and used-vehicle prices have ballooned since the pandemic, cutting into supplies. Looser auto credit has also helped grease used sales, access reaching its greatest in July since November 2015, Cox said.

Few shoppers are finding used cars priced at less than $20,000, automotive data provider iSeeCars.com reported. Just one in nine used units are counted in that category today, compared to almost half of the used market before the pandemic.

ISeeCars found that the average 3-year-old car today costs $32,651, up 38% from 2019.

“Today’s used car prices are among the most powerful examples of the affordability challenge facing consumers,” said iSeeCars Executive Analyst Karl Brauer. “With a $9,000 increase in the average 3-year-old car’s price since 2019, that’s an average of nearly $1,300 per year over seven years.”

To find the psychologically affordable price of less than $20,000 for a used vehicle, consumers must now typically hunt for 7-year-old units as opposed to the 4-year-olds that were most often priced in that range before 2020, iSeeCars said.