Why Finding a Good Used Car Under $20,000 is Becoming Increasingly Difficult

These days, it’s getting harder and harder to find a good used car for less than $20,000. Before the pandemic, a little more than half of all used cars less than five years old were below that price point, but these days, it’s more like 12 percent. But this is Jalopnik. We don’t necessarily need our cars to be less…

The Rising Cost of Used Cars

The used car market has seen a significant increase in prices over the past few years, and the COVID-19 pandemic has only exacerbated this trend. According to recent data, the average price of a used car has risen by nearly 30% since 2018. This surge in prices can be attributed to several factors.

1. Supply and Demand Imbalance

One of the main reasons for the rising cost of used cars is the supply and demand imbalance. The pandemic disrupted the global supply chain, leading to a shortage of new vehicles. As a result, many consumers turned to the used car market, driving up demand and causing prices to skyrocket.

2. Chip Shortage

Another factor contributing to the increase in used car prices is the ongoing global semiconductor chip shortage. These chips are essential components in modern vehicles, controlling everything from engine performance to infotainment systems. The shortage has forced automakers to cut production, leading to a scarcity of new cars and a surge in demand for used ones.

3. Inflation and Rising Costs

Inflation and rising costs of raw materials have also played a role in the escalating prices of used cars. As the cost of manufacturing new vehicles increases, so does the price of used cars. Additionally, higher inflation rates have reduced the purchasing power of consumers, making it more challenging to find affordable options in the used car market.

The Impact on Consumers

The rising cost of used cars has had a significant impact on consumers, particularly those on a budget or looking for their first car. With fewer options available below the $20,000 price point, many buyers are forced to either settle for older, higher-mileage vehicles or stretch their budgets to afford a newer model.

Moreover, the increased prices have also led to a surge in auto loan amounts and longer loan terms. Consumers are borrowing more money and extending their repayment periods to make up for the higher costs, resulting in a higher financial burden in the long run.

Tips for Finding an Affordable Used Car

While finding a good used car under $20,000 may be challenging, it’s not impossible. Here are some tips to help you navigate the current market:

1. Expand Your Search

Consider expanding your search radius to include neighboring cities or towns. Prices may vary based on location, and you might find better deals by exploring areas outside your immediate vicinity.

2. Research and Compare

Do thorough research and compare prices from different dealerships and online platforms. Take advantage of online tools that allow you to compare prices, mileage, and vehicle history reports to ensure you’re getting the best value for your money.

3. Consider Certified Pre-Owned Vehicles

Certified pre-owned (CPO) vehicles are typically newer models that have undergone a rigorous inspection and come with extended warranties. While they may be slightly more expensive than regular used cars, CPO vehicles offer added peace of mind and often come with additional benefits.

4. Be Flexible with Your Requirements

If you have a specific make and model in mind, be prepared to be flexible. Consider similar vehicles from different brands or slightly older models that may offer better value for your budget.

5. Get a Pre-Purchase Inspection

Before finalizing your purchase, always get a pre-purchase inspection from a trusted mechanic. This will help identify any potential issues or hidden problems with the vehicle and ensure you’re making a sound investment.

In Conclusion

Finding a good used car under $20,000 has become increasingly difficult due to various factors such as supply and demand imbalances, chip shortages, and inflation. However, with careful research, flexibility, and the right approach, it’s still possible to find an affordable and reliable vehicle that fits your budget.

Remember to expand your search, compare prices, consider certified pre-owned options, be flexible with your requirements, and always get a pre-purchase inspection. By following these tips, you can increase your chances of finding a quality used car without breaking the bank.

Sources:

• Jalopnik – It’s Almost Impossible to Find a Used Car Under $20k
• Jalopnik – These Are the Used Cars You Would Buy With a $25,000 Budget