Why are used car prices still so high?

Published: Oct. 18, 2023 at 12:06 PM MST
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TUCSON, Ariz. (13 News) - Inflation may be starting to fall, but used car prices are staying high. In Tucson, the average price for a one to five-year-old car is $32,645, according to iSeeCars. As with many shifts in our lives, it started with the pandemic. The supply has gotten better, but still hasn’t recovered, and Tucson has more car shoppers than ever.

”Southern Arizona’s a pretty popular place these days, it’s become quite popular over the last ten years, and you’re seeing more people coming into that area than you have car supply, whether it’s the amount of dealers, the dealer network, and certainly, again, used cars are short everywhere, and if they’re short everywhere in general, a place that’s growing big and has a lot of dynamic activity, they’re going to be even more scarce and in higher demand,” said Karl Brauer, Executive Analyst at iSeeCars, an online vehicle research site.

Think back to 2019: car shoppers could afford more than 20% of late-model used cars with $15,000 to spend. Today that budget means you can afford less than two percent of used cars. So, for what you’d pay for a three-year-old car in 2019, you could only afford a seven- year-old car today.

This is iSeeCars’ list of most affordable popular cars in Tucson: The Jeep Grand Cherokee, Tesla Model 3, Chevrolet Malibu, Ford F-150, and Toyota Highlander. The least affordable were the Subaru Outback (in Tucson, surveys show it’s almost seven percent above the Outback’s national average) followed by Hyundai Elantra, Honda Civic, Honda CR-V, and Toyota RAV4.

Southwest cities like Albuquerque and Las Vegas are some of the priciest for used cars. There are some good deals in Arizona, but you can also save money by shopping cross-country, even if you have to buy a plane ticket or pay for delivery. Or, Brauer says, if you can, wait. He estimates prices will drop within a year. Of course, if the auto strike continues - that could create even lower supply.

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