Used car prices have continued to rise, leaving consumers with fewer budget-friendly alternatives as new vehicle prices remain elevated and broader cost-of-living pressures continue to strain household finances.
According to Cox Automotive’s Manheim Used Vehicle Value Index—which tracks prices for used vehicles sold at U.S. wholesale auctions—values rose 6.2% last month compared with a year earlier. The index also reached its highest level since the summer of 2023.
With many consumers experiencing sticker shock in new car showrooms, more shoppers are turning to the used vehicle market. But affordable midsize SUVs and sedans have become increasingly difficult to find among new models, and tight inventory in the used market means buyers are not getting much relief there either.
Despite the ongoing conflict in the Middle East, rising oil and gas prices and broader geopolitical uncertainty, demand for used vehicles remains strong.
“We thought we’d see some impact from the Middle East conflict, and that may still happen. But right now, the data is clear: used-vehicle demand is healthy, and inventory levels are relatively tight,” Cox Automotive chief economist Jeremy Robb said in a press release.
Cox forecasts wholesale used vehicle prices to rise about 2% this year.
As of February, the average listed price for a used vehicle was $25,287, while the average price of a new vehicle was about $49,100.
Compared with pre-pandemic levels, used vehicle prices remain roughly 30% to 40% higher.
Used car prices had been relatively stable for much of the previous two decades, but the pandemic changed the market dramatically.
Factory shutdowns, semiconductor shortages and surging demand pushed the used vehicle Consumer Price Index from roughly 130 in January 2020 to 209 by June 2022.
The result was a sharp break from the traditional depreciation cycle consumers had come to expect.
Even after prices eased from their pandemic-era peaks, used vehicle values settled at a much higher baseline than before 2020, and that shift continues to shape today’s market.
Another challenge is the volatility of wholesale pricing.
Indexes such as Manheim’s surged by roughly 30% year-over-year in early 2022 before gradually declining. But drops in wholesale auction prices do not always translate into lower sticker prices at dealerships.
Higher financing costs, inventory expenses and tighter dealer margins can keep retail prices elevated even when wholesale values soften.
That has left some consumers questioning whether paying hundreds of dollars per month for a seven-year-old SUV represents a reasonable deal or simply a sign of how distorted the market has become.
Loan terms have also stretched considerably.
Many buyers are financing used vehicles for 60 months, while some are extending loans to 72 months or longer—terms that would have been far less common for older vehicles a decade ago.
The purchase price is only part of the affordability problem.
AAA estimates vehicle maintenance costs at roughly 10.13 cents per mile, or about $1,500 per year for someone driving 15,000 miles annually.
Insurance premiums have also climbed, leaving some consumers paying more today to own and operate a decade-old vehicle than they might have paid for a new car several years ago.
“Stronger retail demand continues to be supported by new vehicle affordability pressures that are pushing consumers toward used vehicles, while lower new-vehicle sales are constraining trade-in volumes and limiting supply into the used market,” Cox said.
Most U.S. buyers continue to choose used vehicles because they remain more affordable than new models.
Cox Automotive expects the U.S. new vehicle market to reach about 15.8 million sales this year.
For used car shoppers, however, higher prices, fewer bargains and continued market volatility may be becoming the new normal.
That means consumers may have to search more carefully—and move more quickly—when genuinely good values appear.
