Whether you like cars or not, it is undeniable that America is built for the automobile.
According to the latest edition of the American Automobile Association's (AAA) American Driving Survey, 95.3% of U.S. residents aged 16 and older drove at least occasionally in 2023.
At the same time, the average American driver spent at least 60.7 minutes behind the wheel and drove 29.1 miles per day last year.
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But even though we drive a lot, cars are expensive and seem to be as unattainable as ever.
According to the latest available data from Cox Automotive, the average list price for a new car in the United States in August 2024 is $46,841, with average transactions that month amounting to $47,870.
Though Cox emphasizes that a third of the available models on the market have list prices below $46,000, the high prices of new cars have many buyers looking at used examples to score a great deal.
Fortunately, new data shows that relief is coming for used car buyers looking to get something "new to them."
Late Model Blues
According to a new study by iSeeCars, the average price of a relatively 'new-ish' car—one to five years old—is down 4.7% from 2023 to $32,672.
Though the figure is significantly less than the near-$47,000 average for a new car, the latest price is still 40% higher than the 2019 average of $23,314. However, iSeeCars Executive Analyst Karl Brauer pointed out that the availability of much cheaper cars contributes to price drops.
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“After years of increasing used car prices, we’ve finally seen prices drop in the past year,” said Brauer.
“While $20,000 would buy approximately half of the 1- to 5-year-old used car market in 2019, that number was down to just 12.7 percent in 2023. Now it’s on the rise again, with 16.5 percent of used cars priced below $20,000 in 2024.”
Additionally, their findings show that market share has increased in all used car segments priced under $30,000, while the share of cars priced above $30,000 has decreased.
iSeeCars data also reveals that the drop in used car prices has been accompanied by an increase in the "newness" of the used cars that are available on the market.
A common indicator of a car's mechanical condition is its mileage, and the researchers found that buyers are snatching up cars with fewer miles than before, even in lower-priced used models.
They found that the average mileage of used cars selling for between $15,000 and $20,000 is 9.2% lower, while cars under $10,000 have 9.6% fewer miles.
“In a complete reversal from the COVID era, where used car buyers had to pay more money for cars with more miles on them, today’s used car buyers are benefitting from not only lower prices but lower miles,” said Brauer. “They’re getting a less used car at a better price.”
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Overall, the analysts at iSeeCars see that the used market is turning around from its conditions during and slightly after the COVID-19 pandemic, as limited supply and high demand were the huge factors behind the inflated price of used cars.
"The situation is slowly moderating, as reflected in today’s lower prices and reduced mileage on 1- to 5-year-old used cars," Brauer said.
"This represents growing value for today’s shoppers, especially when combined with falling interest rates. Used car buyers waiting for improved affordability are finally being rewarded for their patience."
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