It’s no secret that the pandemic threw a wrench into a whole lot of people’s car-buying plans. Things have largely recovered, and prices aren’t as crazy as they used to be, but if car buyers haven’t been keeping a close eye on the market, they could definitely still be in for a shock the next time they walk into a dealership. For example, they probably won’t be able to find anything new for less than $20,000. Additionally, the Detroit Free Press reports the gap between the average price of a new car versus a used car is higher than ever.
In the third quarter of this year, data collected by Edmunds showed the average transaction price of a new car was $47,542, while a used car was $27,177. That’s a difference of $20,365, which is a much bigger gap than experts are used to. “We’ve never seen gaps like this before,” Ivan Drury, Edmunds’ director of insights, told Freep. He also anticipates a lot of prospective new-car buyers will be surprised if they last bought a car before COVID hit.
As Edmunds put it, “With inconsistent discounts on new inventory, consumers with fond memories of deeper discounts and widespread financing deals from their pre-COVID era new-vehicle purchases are likely to shy away from that market this time around and instead opt for a used car lot with more significant savings to be found.”
Those who do find themselves with a budget that’s only big enough to buy used also reportedly fall into two different camps — those looking to spend less than $10,000 and those with a $15,000-to-$30,000 budget. Drury described the former as “thoroughly used vehicles” that are usually more than 10 years old and have at least 120,000 miles. There tends to be a lot more variety in the latter, with the average age being about four years old and having about 50,000 miles.