When she was 17, my daughter named her silver 2009 used Honda Civic Charlotte.
It would be the start of a long relationship after my husband and I found a great “certified” used car in 2012. Our daughter was heading into her senior year, and we were looking for a reliable used car for her to drive.
The mileage on the 2009 Civic was a bit high, at just under 50,000 miles, so we balked at the $18,000 price tag. Generally, experts say you should expect to see between 10,000 and 12,000 miles on a car each year. At three years old, this one had averaged over 16,000 miles. Given the heavy usage, we felt the price didn’t match the car’s condition.
I suspected there was room to negotiate the price since the car had been on the market for 38 days. (Y’all, I’ve kept all my homework and price history on the car in a folder with its maintenance records.)
A week after first looking at it, I called the salesman back, and he agreed to lower the price. We paid $15,952 for the Civic.
My now 31-year-old daughter is still driving Charlotte.
Back then, time and a little haggling were on our side. But today?
What I just described is ancient history compared to the current used vehicle market. If you walk away from a deal now, expecting the car to sit on the lot waiting for a desperate dealer to discount the price, you’re in for a rude awakening. Today’s shoppers are facing record-high prices and a dwindling supply of budget-friendly inventory, according to a new second-quarter report from car-shopping website Edmunds.
“Nothing that you know from before has stayed the same,” said Ivan Drury, director of insights at Edmunds.
At a heart-clutching $32,461, the average price of a three-year-old used vehicle reached its highest second-quarter level on record. That’s 4 percent higher than a year ago and a 15.5 percent increase from 2021, when pandemic-related supply issues affected the industry.
If that wasn’t bad enough, Drury said the most dramatic shift is occurring for used cars priced between $15,000 and $20,000.
In 2019, a budget of $10,000 to $15,000 bought a 4.7-year-old vehicle with about 58,000 miles. Today, that exact same dollar amount gets you a car averaging 8.7 years old with 98,000 miles.
In the $15,000 to $20,000 price range, the average age of vehicles has nearly doubled, from 3.4 years to six years, while average mileage has increased from roughly 42,000 to more than 71,000.
If your budget is between $5,000 and $10,000, the average age has risen from 8.1 years to 10.7 years, and typical mileage now exceeds 120,000 miles, at which point maintenance becomes costly.
“You go from having transportation that would require minimal to no repair to now something that, honestly, you’re gonna be worried about,” Drury said.
Budget shoppers don’t have time to hesitate. Vehicles between $5,000 and $10,000 sold in an average of just 25 days in the second quarter.
Here’s why it’s so tough to find an affordable used car: supply and demand.
Years of reduced new-car production due to the pandemic mean fewer used vehicles are being sold. Americans are leasing less in recent years, reducing the availability of three- to four-year-old off-lease vehicles. Rental agencies have also purchased fewer cars for their fleets. And with prices so high, owners are holding on to their cars longer.
If you’re shopping in this environment, here are some strategies that still apply.
Start with a budget
I know this sounds so simple, but you have to know your upper limit. Despite higher prices and lower inventory, you still need to be certain you can comfortably make that monthly auto loan.
You might also need to increase your budget. Can you spend a little more or put down more money to get a newer used car with lower mileage and improved reliability, which could mean fewer maintenance worries down the line?
Be flexible
You might not find all the features you want on the most popular model. Look at alternative brands or smaller vehicle classes. Do you really need a large SUV? Maybe go for a midsize car.
“You have to become very open-minded,” Drury said. “There are old misconceptions about certain brands. A lot of things have changed. Maybe you would have always avoided the Korean automakers, but nowadays they make a very different product than they used to.”
Prearrange your financing
If you need to borrow, get preapproved from your bank or credit union. The dealer may be able to match the offer, and that’s fine, but you should know how creditworthy you are so that you aren’t paying more for financing than you need to.
Move fast, but not too fast
“Once you find the right one, you also have to act really quick,” Drury said.
But don’t be reckless. Do your homework. I used several websites to hunt for deals, including Consumer Reports, Edmunds, Kelley Blue Book, Autotrader and my always go-to site, CarGurus.
Look for advice on sites that help determine whether a deal is fair, good or overpriced. We used CarGurus when we purchased our daughter’s Civic. Based on CarGurus’ analysis, the internet deal the dealer listed was a “fair” price, indicating there was room to negotiate an even better price. I also noticed on CarGurus that the dealer had dropped the price of the car twice within 30 days. During our timeout, while we were mulling over the purchase, the price had dropped again. We used this information to get an even better deal, and I used the same strategy when we helped our son buy a car two years ago.
Don’t rush to buy, even if you risk losing a car to another buyer. The days of easily finding a three-year-old bargain like Charlotte may be gone for now, but if you don’t panic and do the prep work, you can still find a reliable ride and a deal worth driving home.
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