According to a recent study from iSeeCars.com, used car prices continue to remain high due to a new factor: slow car production from 2020-2022. This period of reduced production has resulted in a shortage of lightly used cars in 2023, further driving up prices in the used car market.
During the pandemic, supply chain issues caused car companies to produce and sell fewer cars than usual, leading to higher prices for new vehicles. This, in turn, forced many buyers to turn to the used car market, creating high demand and limited supply, which contributed to the initial surge in used car prices.
Now, the shortage of lightly used cars has become a significant factor in the continued high prices. The study reveals that the supply of used cars that are one-to-three years old is 28% lower than it was in 2019. As a result, buyers looking for reasonably priced vehicles in this age range are finding themselves with limited options and higher costs. For example, a modest $23,000 budget could have bought an average three-year-old car in 2019, but now that same budget can only get you into a six-year-old vehicle that costs an average of $24,210.
The scarcity of these lightly used cars is also evident when looking at specific models. For instance, a three-year-old Toyota Prius would have cost around $19,903 in 2019, but now it would only get you a seven-year-old Prius. Similarly, a three-year-old Honda Civic that would have cost around $16,000 in 2019 now has a price tag equivalent to an eight-year-old model.
Unfortunately, according to experts, these high prices are unlikely to decrease anytime soon. Factors such as the ongoing high prices of new cars, pent-up demand, and the current auto worker's strike are all contributing to the sustained high prices in the used car market.
In conclusion, the shortage of lightly used cars resulting from slow car production from 2020-2022 is driving up prices in the used car market. Buyers looking for reasonably priced vehicles in this age range are facing limited options and higher costs. This trend is expected to continue due to multiple factors, including high prices of new cars and ongoing supply chain issues.