Used Cars Stop Doing What Buyers Complain About: Depreciating
Buying a new car instead of purchasing a used one is almost justified, if one takes a close look at the numbers.
The average new-car payment is now $712. That, of course, is due at least in part to demand being higher than supply. It’s not that Americans are buying fewer new cars than they used to, with sales having peaked at 17.4 million in 2016 and hovering around there until the Covid pandemic hit. It’s that they can’t.
The chip shortage and chronic supply chain issues mean that when it comes to the desire to purchase a new car post-pandemic, it’s about how willing people are to buy what’s available, while possibly paying over the asking price.
The average cost of buying a new car in May 2022 was $47,148, or about the same as a Kia Telluride SX with all-wheel drive and the Towing Package. Conversely, high demand for new cars means the same for used cars.
You might think you’ll get a better deal with a used car, but you likely won’t. Look for a used Kia Telluride and you’ll find that they’re consistently selling for more than MSRP. That’s the case with most models released just before 2020 or after. The Telluride, with its numerous accolades, is the most prominent victim of demand.
But keep looking, and you’ll see that any redesigned Honda Civic, any Mazda CX-30, virtually any car released this decade will be asking for more as a lightly used car. You may soon realize it may make more sense to buy a new one with no miles put on it.
Just don’t spend more than $47,000. I’ll be mad at you.