Affordable used cars are in tight supply, so shoppers with tight budgets may have to settle for an older model with higher mileage.
The average three-year-old car costs about $33,000, according to an analysis in August from iSeeCars, an online car search site.
A three-year-old car was often the sweet spot for buying used, auto experts say. Those vehicles — typically, leased models going back to dealers for resale — have relatively low mileage; have passed the peak period of depreciation, or drop in value; and often have the advanced safety features found in pricier, newer cars.
But three-year-old used cars priced under $20,000 are increasingly rare. Just one in nine now fits that criterion, the site found, down from about half in 2019, before the Covid-19 pandemic played havoc with car inventories.
A mix of factors, including tariffs under the Trump administration and higher borrowing costs, has pushed up the cost of owning new cars, increasing demand for used models. One Chevrolet dealer lamented the lack of affordable used cars in the quarterly dealer sentiment survey by the research firm Cox Automotive, saying there are “not enough under $20,000 that aren’t total junk or need lots of work.”
Prices for used electric vehicles have also risen, in part from consumers seeking relief from higher gas prices, according to Recurrent, an E.V. analytics firm. (The AAA motor club reported that the average price of a gallon of regular gas was $4.29 on Friday, up from $3.19 a year ago.)
In general, budget-conscious shoppers are paying more for older, higher-mileage cars. This spring, the average used car that sold in the range of $10,000 to $15,000 was nearly nine years old and had more than 98,000 miles on the odometer, according to the automotive website Edmunds.
The same budget in the spring of 2019, in contrast, bought a roughly five-year-old car with about 58,000 miles, Edmunds found.
People who haven’t been in the market for a used car for a while may need to adjust their expectations. “If you’ve ever shopped for a used car before, especially pre-Covid, you’re going to be floored,” said Ivan Drury, director of insights at Edmunds.
What should I know about buying a used car?
Despite high prices, three-year-old cars have been selling at a brisk pace. Those cars spent just over a month, on average, on dealer lots this spring, unchanged from the same period last year, Edmunds found.
Jon Linkov, deputy autos editor at Consumer Reports, cautioned that the average price for used cars included higher-priced models like features-laden pickup trucks and luxury cars. “Gone are the days of the low-mileage $10,000 car,” he said. “But you can still find stuff in the $20,000 range.”
Consumer Reports’ list of recommended used cars this spring (available to subscribers) included the 2023 Subaru Impreza for under $20,000 and the 2023 Nissan Altima for under $22,000.
Mr. Linkov suggested that shoppers make a list of “must haves,” emphasizing safety features and reliability. Does the car have a backup camera and a blind-spot warning feature? (Backup cameras became mandatory in all cars by 2018, he said, but some models included them earlier.)
Don’t fixate on cosmetic details like the car’s color, he said. Carmakers increasingly offer cars in a limited palette — often, black and white — and charge hundreds of dollars extra for more trendy colors, Mr. Linkov said. While he doesn’t prefer black cars, because they show scratches more easily and dark interiors retain heat, he bought a used one for his family because the price was right, he said.
Be ready to act promptly if you’re on a tight budget and find a car that meets your needs. The most affordable used cars — those selling from $5,000 to $10,000 — spent less than four weeks, on average, on dealer lots this spring before being sold, Edmunds found.
Getting preapproved for financing, if you need it, can help with quick decision-making.
What if I want a specific car?
It’s important to be flexible, including on the brand of car you’ll consider, Mr. Drury said.
With the same $15,000-to-$20,000 budget, for instance, a shopper could buy a three-year-old Kia with less than 50,000 miles — or a “thoroughly used” seven-year-old Toyota with more than 85,000 miles, Edmunds found. “Is it worth the premium?” Mr. Drury asked.
Traditionally, he said, used-car buyers focused on names that tend to hold their value over time, like Toyota, Honda, Lexus and Acura. But shoppers willing to consider a Kia, Hyundai or Nissan may find newer vehicles at the same price — sometimes with coverage from a factory warranty still remaining.
“Keep an open mind,” Mr. Drury said.
How much does it cost to own a car these days?
You should also consider the overall operating cost of a car, including insurance, routine maintenance and fuel, experts advised.
“The biggest mistake people make is treating the monthly payment as the price of the car,” Kevin Wince, vice president of consumer lending operations at Navy Federal Credit Union, said in an email. “It doesn’t tell you what the vehicle will cost you to own.”
Small sedans typically are the least expensive models to operate, at about 56 cents per mile, while a half-ton pickup truck approaches 99 cents per mile, according to AAA’s 2025 analysis of the cost of driving a new car (assuming 15,000 miles driven annually).
And while used cars depreciate more slowly, they can have higher maintenance costs, Mr. Wince said.
What is the cost to finance a used car?
Higher prices mean it’s difficult for many people to pay cash for a used car, so borrowing has become more common. The average loan amount for a used car rose to almost $28,000 in the second quarter of this year, up $875 from a year earlier, according to Experian Automotive. The average monthly used-car payment rose $10, to $542, over the same period, even as the average interest rate for a used car fell slightly, to 11.19 percent from 11.57 percent.
Interest rates are lower for new cars. The average rate for a new-car loan fell to 6.35 percent in the second quarter, from 6.79 percent a year earlier, Experian found.
As the price of a used car has risen, Mr. Drury said, loan terms have gotten longer, which helps keep monthly payments lower. Used-car loans now often run as long as seven years.
Where should I shop for a used car?
Buying a manufacturer’s “certified pre-owned” car at a dealership can be a smart option, especially if you plan to keep the car for a long time, said Karl Brauer, executive analyst for iSeeCars. Manufacturers may even offer lower-rate financing on those cars.
The major rental car companies turn over their fleets regularly and can also be a source of one- to two-year-old used cars, Mr. Drury said. While buyers may worry that rental cars have been driven roughly, most renters want to avoid charges for damage and drive rental cars as they normally do, he said.
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