Whether you like cars or not, it is undeniable that America is built for the automobile.
According to the latest edition of the American Automobile Association (AAA) American Driving Survey95.3% of US residents ages 16 and older drove at least occasionally in 2023.
At the same time, the average American driver spent at least 60.7 minutes behind the wheel and drove 47.1 kilometers per day last year.
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But even though we drive a lot, cars are expensive and seem more unattainable than ever.
According to the latest data available from Cox AutomotiveThe average list price of a new car in the United States in August 2024 is $46,841, with average transactions that month totaling $47,870.
Although Cox emphasizes that one-third of the models available on the market have list prices below $46,000, the high prices of new cars have many buyers looking for used examples to get a good deal.
Fortunately, new data shows that relief is coming for used car buyers looking for something “new to them.”
Latest model blues
According to a new study by iSeeCarsthe average price of a relatively “new” car; Cars one to five years old are down 4.7% from 2023 to $32,672.
Although the figure is significantly lower than the average of almost $47,000 for a new car, the latest price is still 40% higher than the 2019 average of $23,314. However, iSeeCars executive analyst Karl Brauer noted that the availability of much cheaper cars is contributing to the drop in prices.
“After years of increasing used car prices, we finally saw prices drop last year,” Brauer said.
“While $20,000 would buy about half of the 1- to 5-year-old used car market in 2019, that number dropped to just 12.7 percent in 2023. Now it's rising again, at 16. 5 percent of used cars priced under $20,000 in 2024.”
Furthermore, their findings show that market share has increased in all segments of used cars priced below $30,000, while share of cars priced above $30,000 has decreased.
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iSeeCars data also reveals that the drop in used car prices has been accompanied by an increase in the “newness” of used cars available on the market.
A common indicator of a car's mechanical condition is its mileage, and researchers have found that buyers are purchasing cars with fewer miles than before, even in lower-priced used models.
They found that the average mileage of used cars selling between $15,000 and $20,000 is 9.2% lower, while cars under $10,000 have 9.6% fewer miles.
“In a complete reversal from the COVID era, where used car buyers had to pay more money for cars with more miles, today's used car buyers are benefiting not only from lower prices but of lower miles,” Brauer said. “They're getting a less used car at a better price.”
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Overall, iSeeCars analysts see the used market changing from its conditions during and slightly after the COVID-19 pandemic, as limited supply and high demand were the main factors behind the inflated price of used cars.
“The situation is slowly moderating, as reflected in today's lower prices and reduced mileage of 1- to 5-year-old used cars,” Brauer said.
“This represents increasing value for today's buyers, especially when combined with falling interest rates. Used car buyers waiting for greater affordability are finally being rewarded for their patience.”
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