If you're having a hard time buying a car, you're not alone. The costs for new cars and used vehicles alike continue to remain unusually high, and an automobile that costs under $20,000 is becoming a truly rare breed.
According to a report from online car sales platform iSeeCars.com, used cars that cost below $20,000 make up just 12.4% of the market in 2023, a massive dip in market share since 2019.
Unsurprisingly, new car shoppers have an even harder time finding vehicles under that price point: Car valuation company Kelley Blue Book says that there is only a single model on the new car market selling for less than $20,000, on average.
What's more, reports recently surfaced that this lone sub-$20,000 new car is being discontinued.
Cars for $20,000 or less are disappearing
Four years ago, cars priced under $20,000 made up 49.3% of the total used market. In the years since, the share of cheap used cars has dropped by almost 37 percentage points.
Top-selling used models have seen price increases from 20% to almost 57%. Here are some of the used cars seeing the biggest price hikes since 2019:
- Ram 1500 - 56.9% price increase
- Toyota Corolla - 49.8% price increase
- Toyota Camry - 49.3% price increase
- Honda Civic - 46.6% price increase
- GMC Sierra 1500 - 44.1% price increase
- Honda Accord - 43.1% price increase
- Hyundai Elantra - 42.0% price increase
- Toyota RAV4 - 41.0% price increase
- Jeep Wrangler - 38.6% price increase
- Honda CR-V - 37.1% price increase
Moreover, the mileage of many used cars on the market is vastly different from 2019 as well. More than half of cars on the market nowadays have 20% more miles than they did four years ago, according to the report.
Buyers are effectively paying far higher prices than they previously did for cars that are older and more weathered. The average mileage of top-selling used models like the Accord, CR-V, Camry and RAV4 have more than doubled during this period.
As for new car prices, Kelley Blue Book's July analysis shows that for the most part, costs have flattened out. The average transaction price (ATP) for a new car in July 2023 is up only 0.4% year over year. Still, sales prices flattening doesn't mean much for deal hunters, as the ATP of a car remains well over $48,000 — compared to about $38,000 in 2019.
While new car prices are crawling much more slowly than used ones, most models have inched out of the sub-$20,000 price range. In fact, one model — the Mitsubishi Mirage — is the only vehicle currently selling new for under $20,000.
On Tuesday, the trade publication Automotive News reported that the Mitsubishi Mirage will be discontinued by 2025, citing industry sources.
One silver lining comes from electric vehicles (EVs), which have seen sizable price decreases compared to the rest of the new and used car markets. Average prices for new EVs reached their all-time high of $66,000 in June 2022; since then, transactions prices have decreased by 19%.
This sector of the auto market is still not exactly budget-friendly, but it is seeing much faster drops in sticker price than other vehicles. Used EV prices, too, are dropping quickly, particularly ones made by category leader Tesla.
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