The average list price for a used vehicle in the U.S. rose to $24,414 at the start of June. That’s nearly $2,000 higher than the previous record, set just a month before.
At the end of May, prices were already 25% higher than they had been in 2020. The average list price crested the $20,000 mark for the first time last summer and has been rising since.
Supply Improving, But for The Wrong Reasons
The news comes even as the supply of available used cars has improved slightly from its April low. Dealerships had a total supply of 2.38 million cars to sell at the end of May – about 150,000 more than in April.
Supply may have improved, however, because high prices kept some vehicles from selling. “Higher prices likely are slowing the sales pace, which is allowing existing inventory to last longer,” explains Charlie Chesbrough, Cox Automotive senior economist. “With the new-vehicle market still inventory-constrained and consumer interest in all vehicles elevated, high prices and short supply for the used market is likely to linger throughout the summer.”
Cox Automotive is the parent company of Kelley Blue Book.
The Least Expensive Cars are the Hardest to Find
Used car dealers are having a particularly tough time finding higher-mileage, older cars to sell at lower prices. Vehicles in the under $15,000 segment made up 18% of the used market last summer. This year, they comprise less than 1%.
Waves that rock the new vehicle market make their way into the used vehicle market years later. “More affordably priced 10-year-old vehicles are scarce due to lower new-vehicle sales for several years during the Great Recession,” Chesbrough explains. Car sales remained low for several years in the aftermath of the 2008 recession, leaving fewer older cars for the used market today.
“The average price for a used vehicle is high because we have so few of those older vehicles. Supply is still adequate unless you need an affordable, older car, and then it’s terrible.”
That makes this a great time to part with your older car, but only if you have a spare one to sell because it’s a brutally hard time to replace one.
