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Why are most used cars now selling for over $20,000?

The days of finding a low-mile, decent used vehicle for $15,000 or $18,000 are over as consumers look for more features on cars.
Posted at 6:58 AM, Aug 23, 2023

Whatever happened to good, cheap used cars? If you are heading to a car dealership soon, good luck.

A new report says affordable used cars are vanishing, leaving buyers with older models with often twice as much mileage.

Hanley Clark was signing the papers for a used minivan after weeks of frustration.

"Prices are high, mileages are high," he said.

He was shocked to see so many used cars for $20,000 or higher. Dealer Gary Helflin of Courtesy Automotive says there are several reasons for high prices: One, buyers want all the technology on today's newer vehicles.

"They want blind spot detection and rear-view cameras," Heflin said.

The bigger issue, Heflin says, is that there are fewer 3-year-old lease turn-ins these days and fewer low mileage trade-ins.

"People that may have traded a car at 70,000 miles say I can't get a new car; I'm gonna keep it. So they keep racking up miles before they finally trade it," he said.

Looking for a new car under $20,000? Good luck. Just 1 remains
A Mitsubishi Mirage.

Looking for a new car under $20,000? Good luck. Just 1 remains

With prices for new and used cars having soared since the pandemic, $20,000 is no longer much of a starting point for a new vehicle.

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Study finds few cheap, low mileage used cars

A report from iSeeCars.com shows how few cheap cars are now available for new buyers, or parents looking for a first car for a 16-year-old. It says used cars under $20,000 made up 49% of the market in 2019 — nearly half the market.

Today, those cars make up just 12% of the market.

Karl Brauer of iSeeCars said, "If you've got $20,000 to spend on a used vehicle, you have to get an older model year one and/or one with considerably more mileage."

Today, the average price of a used car between 1-5 years old is more than $34,000, up from $22,000 in 2015.

There is one upside, though, according to Joseph Yoon with Edmunds.com.

"If you have a car right now to trade in, then that's your biggest bargaining chip," he said. "That vehicle that you have in the garage, that you have sitting in the driveway, that's going to be your cash cow."

Looking for a bargain? Heflin recommends avoiding pricey SUVs and full-size pickup trucks.

"Probably the best value out there is a good low-mile 4 door sedan," he said, talking about several clean Malibus and Impalas on his lot for around $18.000.

Clark ended up with a used minivan to avoid high SUV prices.