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- A $20,000 buyer is looking for a car looking for a second-hand model of a late model.
- The average price for a used three-year-old vehicle is $32,600, an increase of nearly $9,500 since 2019.
- A few tips when finding cheap second-hand cars is to increase the search radius and be flexible with make and model.
Prior to the Covid-19 pandemic, more than half of used cars sold nationwide were priced for less than $20,000 for vehicles from three years ago. Today, those same type of vehicles account for only 11% of used cars.
In fact, most shoppers in the second-hand car market will find it difficult to find a three-year-old model that’s under $30,000. According to a new survey on research website ISEeCars.com, “Sub $20,000 used cars are almost gone,” and the average price for a used three-year-old vehicle is $32,635. This is $9,476 from six years ago.
“There’s very little negotiation for used cars due to the high demand,” said Carl Brower, executive analyst at ISEeCars.com, based in Woburn, Massachusetts. “Pres for used cars have not been dramatically priced over the past two years, but have dropped a little bit each month. Over the past three months, they have risen again.”
In February, the average price for used cars for ages 1-5 was $31,257, up 1% from the same period last year. In June, it was up to $32,437, a 4.8% bump a year ago before June, Brower said.
Of course, it’s still cheaper than buying a new car. According to Edmunds.com, the average manufacturer’s proposed retail price in June was $50,523, while the average transaction price (what customers pay for their cars) was $48,261.
“Who knows what’s going to happen in July? Maybe the trend will stop?” Brower said of the rise in used cars.
What’s not available for $20,000
Metro Detroit reflects what’s going on nationwide. Brower said in 2019 that 52.2% of Motor City’s 3-year-old used car stock was priced below $20,000. Today, only 13% of Metro Detroit’s used car stock consists of three-year-old cars priced below $20,000.
Brower told Detroit Free Press, part of the USA Today Network that his company conducted an investigation in mid-June. We analyzed data on 2.6 million cars from three years ago. Because they focused on cars from three years ago, they are at the “center of the age group of 1-5 years old” in the second-hand market.
The study includes what bestselling 3-year-old used models are virtually unavailable for under $20,000.
For example, Brower said in 2019 that 97.6% of the 3-year-old Honda Civic cars can be purchased for $20,000. Today, 5.7% of the 3-year-old Honda Civic is available for $20,000 in that price range.
“It’s a 94.1% drop-off,” Brower said. “Toyota Corolla, 99.9% lost around 37% as it was available to $20,000 buyers in 2019 and is now 62.9%.
The survey found that passenger cars saw the biggest price rise, up 48.7% since 2019. Used pickup prices will rise by 28.8%, while second-hand SUVS prices will rise by 15.4%. Here’s how this translates into dollars:
- Passenger car: Average 2019 list price: $19,734. Average price today: $29,343.
- SUV: Average list price for 2019: $31,649. Average price today: $36,509.
- Pick-up: Average list price for 2019: $31,627. Average price today: $40,731.
- Combined all vehicle types: Average list price for 2019: $23,159. Average price today: $32,635.
How Covid has raised car prices
The dramatic changes in pricing in the second-hand car market could be attributed to several things, Brower said.
First there is inflation. This saw the country rise after the Covid-19 pandemic. But Brower said the average price increase of $9,500 is not entirely due to inflation.
He has criticised more for the production of limited new cars in late 2020 as carmakers are igniting assembly plants due to the pandemic. They returned online in a few weeks, but it takes time to bring suppliers and production back to full capacity. When they finally did, many automakers were hit by the 2021 semiconductor shortage, once again hampering new vehicles production.
“So you were a huge hit with new car production from mid-2020 to 2022,” Brower said. “We are now in 2025, and the 3-year-old cars would have been built around 2021-2022. They are not in regards to the volume of needs in the second-hand market, as supply of new cars over three years ago is limited.”
Additionally, prices have been systematically increased due to demand as a result of the pandemic. As there is no public transport in the Surburban area, these people now need to buy cars.
“So when there were production restrictions on new cars, demand for new cars increased…and this was three or four years ago,” Brower said. “It pushed the prices of new cars, pushed people into the second-hand market, and pushed the prices of used cars.”
To add to the shortage of available late model used cars, people who leased their cars three or five years ago removed those leases, looked at the prices of new and used cars and realized that buying a lease was the cheapest way to get another car, he said. Therefore, he said these leased vehicles have not returned to the second-hand market.
“So all of these things can, or can, affect, pricing for used cars, do so in a bad way,” Brower said. “It made them more expensive.”
Used car buying advice
So where does this leave second-hand car buyers?
“They have to buy older cars at higher mileage,” Brower said. “If you look at what’s on sale, it was a three-year-old car for $20,000, and it was like 32,000 miles. Now I’m buying a six-year-old car with $20,000, which costs 71,000 miles.”
The good news is that older second hand models with higher mileage will last longer, he said, as the cars are better built.
“If you’re forced to buy an older, higher mileage vehicle, thankfully an older vehicle is better than before,” Brower said. “I used to consider 100,000 miles as ‘it’s disposable.’ That’s no longer true.
Brower offers the following tips for second-hand car buyers:
- Investigating market value. Visit www.iseecars.com or other sites like Edmunds and Kelley Blue Book and enter the VIN number of the vehicle you’re interested in to find the price you need to pay.
- Become flexible: If you are accepting a variety of brands and models, it will help you find something in the price range. “Most things are expensive,” Brower said. “But there are pockets. With models, manufacturers, parts of the country, things are cheap.”
- Please get tested before purchasing: If it’s a private sale, you’ll pay $200 and have a professional mechanic inspect your used car.
- Request Carfax printing: Dealers insist on looking at printed Carfax reports on cars.
- Are you willing to go outside your home market to find a fair deal. “Suppose you’re in Detroit and you have a car you want in Iowa. Let’s say it takes 12 hours to get to the car,” Brower said. “Well, if you’re saving $1,200 on the price of a car, then you’re paid $100 an hour to get it, so that’s pretty much.”
If you have to get on a bus or flight, it may not be a big savings, he said. But Brower is very much in expanding your radius where you want to get a car to save a few dollars.
“Sometimes the dealer ships it out and it could be the most economical,” Brower said. “It could cost $800 to ship it, but if you’re saving $2,400 on the price, you still have a $1,600 saving.”
Prices may not be withdrawn
Brower said prices could be reversed, but it’s hard to imagine unless the economy has “substantial and unwelcome disruption.”
Last year, average used car prices remained stable. However, when President Donald Trump applied a 25% tariff on all vehicles and auto parts imported this spring, buyers bought new and used cars, fearing that the market would flood and tariffs would inflate prices. That sudden rush of demand, with limited stock, actually increased prices, Brower said.
“We’ve stabilized, but you wouldn’t expect a 1-5 year car to be available for around $20,000, just like before the pandemic,” Brower said. “I don’t think it’ll come back. We’re seeing continuous stabilization, but there’s no pricing withdrawal.”
Jamie L. Larrow is a senior Autos writer covering Ford Motor Company for the Detroit Free Press. Please contact Jamie at jlareau@freepress.com. Follow her on Twitter @Jarouan. Sign up for our car newsletter. Become a subscriber.
