Pay Up: Average Price of a Used Car in America Shockingly Close to $30,000

Matthew Guy
by Matthew Guy

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]

Matthew Guy
Matthew Guy

Matthew buys, sells, fixes, & races cars. As a human index of auto & auction knowledge, he is fond of making money and offering loud opinions.

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  • Teddyc73 Teddyc73 on Jan 04, 2022

    Shocking!

  • TDIGuy TDIGuy on Jan 05, 2022

    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.

  • TheMrFreeze That new Ferrari looks nice but other than that, nothing.And VW having to put an air-cooled Beetle in its display to try and make the ID.Buzz look cool makes this classic VW owner sad 😢
  • Wolfwagen Is it me or have auto shows just turned to meh? To me, there isn't much excitement anymore. it's like we have hit a second malaise era. Every new vehicle is some cookie-cutter CUV. No cutting-edge designs. No talk of any great powertrains, or technological achievements. It's sort of expected with the push to EVs but there is no news on that front either. No new battery tech, no new charging tech. Nothing.
  • CanadaCraig You can just imagine how quickly the tires are going to wear out on a 5,800 lbs AWD 2024 Dodge Charger.
  • Luke42 I tried FSD for a month in December 2022 on my Model Y and wasn’t impressed.The building-blocks were amazing but sum of the all of those amazing parts was about as useful as Honda Sensing in terms of reducing the driver’s workload.I have a list of fixes I need to see in Autopilot before I blow another $200 renting FSD. But I will try it for free for a month.I would love it if FSD v12 lived up to the hype and my mind were changed. But I have no reason to believe I might be wrong at this point, based on the reviews I’ve read so far. [shrug]. I’m sure I’ll have more to say about it once I get to test it.
  • FormerFF We bought three new and one used car last year, so we won't be visiting any showrooms this year unless a meteor hits one of them. Sorry to hear that Mini has terminated the manual transmission, a Mini could be a fun car to drive with a stick.It appears that 2025 is going to see a significant decrease in the number of models that can be had with a stick. The used car we bought is a Mk 7 GTI with a six speed manual, and my younger daughter and I are enjoying it quite a lot. We'll be hanging on to it for many years.
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