Contorted Pre-owned Market Nudges Buyers to Opt for Older Cars

The current condition of the used car market can only be described as bedlam. The aftermaths of disrupted new car production over the past years have catapulted prices of pre-owned vehicles, constraining buyers to resort to much older models than they previously would have considered, according to a new examination from iSeeCars.

The study demonstrated a clear-cut disturbance in the former value-for-money scenario, with a marked elevation in vehicle prices across the board. To put it into perspective, a spending budget of $23,000 could have procured a three-year-old car in 2019. Fast-forward to today, the same amount scarcely suffices to purchase a six-year-old vehicle. Karl Brauer, an analyst at iSeeCars, partly attributes this escalation to a decline in production during the pandemic era.

The availability of one-year-old pre-owned vehicles plunged nearly 46% compared to 2019, while two- and three-year-old cars witnessed supply shrinkages of 19.5% and 26.7% respectively, shedding more light on the scarcity driving this price inflation.

The impact of these shifts is glaringly evident - late-model used cars have slipped beyond the grasp of affordability for many. In a stunning leap, one-year-old models that were priced around $28,000 in 2019 have escalated to $46,403 in 2023, signifying a 67% hike. Concurrently, older used models observed price surges of up to 53% in certain instances. On an average, used vehicle prices have risen by 33%.

Given the course of these developments, an older used car purchase seems like a viable choice, but holds its own setbacks. Prices for even the least desirable older models have swollen considerably. An eight-year-old Hyundai Accent costs approximately $200 more than previous estimates, although a handful have seen a dip in prices. Regardless of the cost, an unavoidable fact is that a considerable fraction of buyers are being compelled to invest in older cars which could potentially be costly to maintain and operate over time.

Aside from regular drivers, this situation equally distresses those hunting project cars. The era of scavenging reasonable bargains for projects from Craigslist or Facebook Marketplace seems to have concluded, and the money that would've bought a decent project in earlier times barely covers a rust-laden vehicle sans an engine today.