By on January 3, 2022

It will surprise exactly zero of our readers that prices of second-hand vehicles are through the roof. A constricted new car supply which leads to a dearth of trade-ins has contributed to customers facing the prospect of paying exorbitant sums for previously loved vehicles. Now, a new stat from Edmunds.com puts a precise number on the issue.

According to a Detroit News story, eggheads at Edmunds.com have reported the average price of a used vehicle in November 2021 was a staggering $29,011. This figure is very nearly 40 percent more than it was just one year prior, putting an exclamation point on the notion that deals on second-hand cars are few and far between these days. The era of waltzing onto a dealer’s lot and finding a good vehicle for the price shown in this post’s hero image is squarely on the back burner.

Parsing these numbers reveals some alarming details. That average price represents a payment of $533 per month when calculated with $0 down and 5 percent state taxes on a 72-month note signed at 7.95 percent. That latter number is not as exorbitant as one might think if someone has good-but-not-great credit. Now, the gubbmint census department claims the median household income in 2020 was $67,521 and many talking heads in the investment arena suggest that one’s car shouldn’t consume more than 20 percent of their take-home pay. Considering the noted monthly payment, plus items like insurance and fuel, it starts to become clear why some media outlets may now breathlessly report that the average American can no longer afford a used car.

Oh, by the way – the same experts suggest the average price of a new car is rapidly approaching $46,000. Alert readers will quickly calculate this represents an uncomfortable truth that the average used car is priced at 63 percent of a new one. That’s borderline terrifying but it wasn’t always so. Back in 2019, this number was roughly half.

It doesn’t take a major in Economics to predict these sums are going to cause problems down the road if prices return to pre-pandemic levels. Even if values simply return to some semblance of sanity, there will be umpteen zillion customers who will be upside-down on their vehicle notes. This will create one of two scenarios: Sensible shoppers who find themselves too far in the ditch will simply hang onto their car (exacerbating the supply problem and perhaps driving values up again) or the country will end up in some kind of sub-prime crisis like we were a decade ago.

Neither is much fun. Shopping wisely has never been more important.

[Image: Shutterstock]

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26 Comments on “Pay Up: Average Price of a Used Car in America Shockingly Close to $30,000...”


  • avatar
    dal20402

    The only people who should be buying a car today—new or used—are people who have absolutely no choice: their current car was totaled or suffered a mechanical failure that would cost way more than the car is worth to fix. If that’s not you, just wait.

    I don’t have a study, but it also appears to me that the difference between retail used car values and wholesale ones has grown a little bit. If I’m right, not only are buyers boned, but people trading in are losing a bit more than they did before.

    • 0 avatar
      Freddie

      I looked at Carvana and Carmax to get quotes on my 2019 Civic, and they will pay me about what I paid for the car when I bought it new.

      • 0 avatar
        28-Cars-Later

        I noticed my own was right above MSRP in MY18, but with incentives and negotiating about $4K over what I actually paid. In your own case depending on mileage and condition, Carvana may be dishonest in their offer, here are some comps:

        MY19 HONDA CIVIC 4D SEDAN 2.0L LX

        12/14/21 $26,305 3,136 4.6 4G/A Silver Lease West Coast California
        12/14/21 $21,000 13,542 3.5 4G/A Blue Lease Southeast Birmingham
        12/22/21 $23,000 13,615 4.6 4G/A Silver Regular Northeast New Jersey
        12/29/21 $21,500 14,063 3.0 4G/A Black Regular Southwest Dallas
        12/29/21 $19,500 14,814 3.3 4G/A Blue Lease Northeast New Jersey
        12/10/21 $24,500 14,862 4.5 4G/A White Regular Southeast Fort Lauderdale
        12/21/21 $19,250 14,972 2.0 4G/A Black Regular West Coast Riverside
        12/17/21 $23,200 15,441 4.1 4G/A Red Regular Northeast Pennsylvania
        12/14/21 $24,250 15,680 4.7 4G/A White Lease West Coast Riverside
        12/23/21 $22,000 16,012 3.7 4G/A Gray Regular Southeast Atlanta
        12/16/21 $23,000 16,716 3.5 4G/A Gray Lease West Coast Southern California
        12/19/21 $20,000 16,797 4.4 4G/A Gray Regular Northeast Pennsylvania
        12/28/21 $23,500 16,941 4.3 4G/A Gray Lease Midwest Ohio
        12/30/21 $21,500 17,862 3.2 4G/A Silver Lease West Coast Southern California
        12/14/21 $22,900 18,039 4.4 4G/A Gray Regular Midwest Ohio
        12/22/21 $18,400 18,079 2.5 4G/A White Regular Northeast New Jersey
        12/28/21 $23,000 18,093 4.5 4G/A White Lease Southeast Orlando
        12/15/21 $23,000 18,995 4.5 4G/A White Lease Southeast Central Florida
        12/17/21 $23,300 19,185 4.6 4G/A White Regular Southeast Georgia
        12/10/21 $21,500 19,361 2.9 4G/A Gray Lease Northeast Pennsylvania
        12/14/21 $25,000 19,869 4.4 4G/A Gray Regular West Coast Riverside
        12/28/21 $20,600 19,875 4.4 4G/A Black Regular Southeast Orlando
        12/14/21 $23,250 22,007 4.5 4G/- – Gray Regular Southwest Houston
        12/16/21 $21,995 22,226 – – 4CY/A Gray Regular Midwest Milwaukee
        12/29/21 $23,800 22,260 4.6 4G/A Blue Regular Southeast Nashville

    • 0 avatar
      28-Cars-Later

      Wholesale has been +30% from prior years since 2014, the spread was so little with incentives in 2018 as you know I bought my first ever new car.

      What I did notice Dal was while the letters the Toyota dealer sends me about “we want to buy your car” keep increasing in value, the max offer is always *at least* 5% lower than the median MMR. So its conceivable the [INSERT CURSE NAME HERE] are screwing both sides, with the sellers happy they are getting paid more in many case than they paid.

  • avatar
    Freddie

    It can be a blurry line that separates “wants” from “needs”, but you shouldn’t need to want a $46,000 new car, especially when it requires a six year loan.

    Even in today’s crazy market, you can still get an “Ace of Base” Honda Accord LX for under $30K – certainly no penalty box. And to buy a used car for that price? What do they say about fools and their money?

    • 0 avatar
      Russycle

      Good luck finding that LX. Just checked, there’s exactly one new Accord LX within a hundred miles of me. “Just buy new” isn’t as easy as it used to be, which is why used prices are nuts.

    • 0 avatar
      JMII

      This almost makes getting a new car for $40k seem like a deal. Problem is you can’t find one as the lots are empty.

      • 0 avatar
        tomLU86

        Perhaps by some alignment of the stars, EV availability might increase, while ICE availability continues to be hobbled by whatever it is that is hobbling it.

        “Well, I’m sorry we don’t have what are looking for, but have you considered this nice, new EV? We have a few in stock, there is as nice tax credit that will save you money, and in the future all cars will be EVs. I think you should consider it–my EV customers love theirs! They are mad at me for not getting them into EVs sooner. Just saying…”

        That sounds so much nicer than

        “I don’t have any other vehicles like that now. The reason we have to charge more than MSRP is because we must fight other dealers to get vehicle. I have others waiting for the vehicle I promised you in 4 months willing to pay more. But you can get this EV, for a lot less, and right now”

        • 0 avatar
          SCE to AUX

          @tomLU86:

          EVs are pretty hard to come by as well, because they are suffering from the same supply chain issues.

          The scenario you describe might be legislated into existence someday, but for now I don’t see dealers interested in selling EVs since the customer won’t be returning for much service.

          And frankly, dealers remain pretty clueless about the EVs on their lot. They’d much rather sell you an SUV with deluxe paint protection, than educate the customer on charging times and honest range expectations.

        • 0 avatar
          zerofoo

          This is one of the reasons we are considering a used Nissan Leaf for my daughter when she gets her driver’s license next year.

          They are still reasonably priced, and perfectly suited for the type and amount of driving she will do.

        • 0 avatar
          RHD

          1) Buy a nice classic used car with a manual transmission and a bad engine for a couple grand.
          2) Convert it to electric with one of the all-in-one kits.
          3) Use the rest of your used car budget to put solar panels on your roof.
          4) You now have a great car with free fuel, faster than stock acceleration, and no household electric bill. And, no interest payments on a depreciating asset.

    • 0 avatar
      SCE to AUX

      “you shouldn’t need to want a $46,000 new car”

      Remember that’s an average, so there are people on both sides of that amount.

      The most I’ve ever paid for a new vehicle was $25k in 2002, equivalent to $39k today. And it was a dud Passat. My dud 05 Honda was an equivalent $37k, but I’ve never spent anything close to those numbers on any other car purchase.

      But some buyers’ vanity compels them to impress their neighbors, family, and friends.

    • 0 avatar
      dal20402

      Manufacturers are discontinuing low-end trims left and right, because they can easily sell out their production capacity building higher trims only. Even some lower trims that are still available on paper have gotten very hard to find in practice. There’s just no incentive to build a $30k Accord when you could sell that same unit in a $38k trim.

  • avatar
    ajla

    My Kia’s Vroom value went up $1,000 in December (now to $33,060). In August 2020 it had an offer of $25,600. $33k might be higher than it was worth the day I drove it off the lot in late 2018.
    Over the holiday I had some friends/family check and all were surprised by how high things were, with two reporting the offer was greater than their initial purchase price.
    Has there been a time in the last 50 years where used cars were steadily appreciating like this?

  • avatar
    Jeff S

    Not in the last 50 years the last time cars held their value was just after World War II when the car companies were starting to gear up for domestic auto production and buyers had to get on a waiting list to buy new cars. My parents got on 2 waiting list one for a 46 Ford and the other for a 46 Chevy which at the time you were not supposed to do. They got the 46 Ford first but when they found out they were going to get the 46 Chevy they sold the Ford for more than what they paid. That is the last time the whole car industry was affected but since then there have been certain models of cars people have paid more than sticker and waited long periods of time from mainly Japanese manufacturers.

  • avatar
    kcflyer

    Out at a restaurant last night noticed a Toyota add on the tv there during an NFL broadcast. So it’s a national feed for a prime time slot. Advertising toyotathon and 1.9 apr on RAV 4. My question is, why bother? If supplies are so tight and dealers are all charging full sticker and many adding more why is Toyota and others advertising deals? Why bother offering low interest rates if people are desperate or dumb enough to buy right now? On a side note that is the closest I have come to watching the NFL since they went full woke:)

    • 0 avatar
      SCE to AUX

      I think the answer is found in a local Ford radio ad, in which they ask “why settle for a compromise vehicle on the lot, when you can order exactly what you want at our dealer?”

      Translation: “We have no inventory, but please come in and order *something* so we can justify our existence. Don’t worry about the 4- to 6-month delivery time.”

      They show more cars in the ads than some dealers have on their lots.

      • 0 avatar
        kcflyer

        yes but you can’t lock in a promotional rate on a vehicle that has not been built. At least not in my experience. At best you can lock once you have a VIN

  • avatar
    Turbo Is Black Magic

    Welcome to the everything bubble! I feel bad for all these people when the inevitably try and roll all that massive negative equity into the next loan to try and keep up with the other lemmings.

  • avatar
    ToolGuy

    Hey, we ain’t running a charity here.

    Remember at my public high school when they told us that any kid in the USA could grow up to be President? That was a lie.

    Automakers have been listening more closely to the advice of automotive journalists, and the more they do this, the more we are all screwed.

    Have a fantastic year!

    • 0 avatar

      “any kid in the USA could grow up to be President? That was a lie.”

      Why, Trump became by accident the Presidentof the US but that was allowed only once and will never happen agian. Political elite learned its lesson. They will never allow again nonpolitician to become POTUS again.

      • 0 avatar
        RHD

        You underestimate the number of semiliterate idiots in this country, and how gullible they are to being spoon-fed political rhetoric without even knowing what its source is (cough, cough).

  • avatar
    bullnuke

    Great. Now there’s gonna be another couple of shortages because of all these increased prices…hookers and blow.

  • avatar
    teddyc73

    Shocking!

  • avatar
    TDIGuy

    Best situation right now seems to be selling used and buying new. At least if you buy from a “one price” dealer that can’t jack up the new price beyond list.
    Brother in law’s Kia Forte caught the compression failure bug that plagues that engine. Since his warranty is almost up and they haven’t figured out how to fix it yet, he decided to trade it in on the last 2021 Forte they had on the lot. They offered him $1500 more than he owed on the trade, plus 0% financing he’s got a newer car with a higher trim level and lower monthly payment than he had before.

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