MINNEAPOLIS — After a severe shortage during the pandemic the inventory of used cars is slowly growing, but even if you're able to find a good deal, buying used is now more expensive than ever before.
A recent study from iSeeCars shows the average used car is 47.7% more expensive than it was before the pandemic.
For example, researchers said back in 2019, a used Honda Civic was selling for an average of $16,577.
In 2023, researchers say the same used Honda Civic is now selling for around $24,301.
"But the number that really got us was the mileage on these cars, that you're getting on average 20% more mileage on these cars. So, you're paying more for cars that are further used up,” iSeeCars executive analyst Karl Brauer said.
Car analysts say these higher prices are hitting buyers on the lower end of the market especially hard.
According to the study, in 2019, nearly half of all used cars were worth less than $20,000.
Now, results show around 12% of used cars are selling for less than $20,000 and the number is even lower in the Twin Cities with about 9% of cars selling at that price point.
Scott Lambert with the Minnesota Auto Dealers Association says prices are slowly coming down and he expects that trend will continue in the coming months, but he says buyers shouldn't expect any big price drops any time soon.
"What we need to have prices come dramatically down is an oversupply of used vehicles and there's not going to be an oversupply for quite some time,” Lambert says.
That's because the used car market is tied to the new car market and Lambert says the car companies are still ramping things up after the pandemic.
"The new car supply is better. It's not back to where it was, but it is better,” Lamber says.
"We need a couple years of normal new car production to balance out years of having it constricted,” Brauer adds.
Meanwhile, car loans are also more expensive, with credit scores becoming more important than ever.
According to Experian, having good credit will get you an interest rate of around 7% for a used car, but with bad credit, buyers could end up paying nearly 22% for the same loan.
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