New cars more expensive than ever, used car prices are falling

Reasonably priced new cars are like unicorns in the U.S. these days, as automakers seem intent on cornering the luxury market entirely. Perhaps now is the time to look at the used car market, where prices have fallen consistently since the peaks of the pandemic. Read on to understand the woes of new car buyers – and the opportunities ahead in the used car market.

New cars are more expensive than ever

According to a new report by Cox Auto Group (opens in new tab), the US new car market is turning into a luxury car market where new vehicles are only available to wealthier buyers. The dramatic shift can be tied to supply disruptions, new technology, limited inventory, higher interest rates and automakers increasingly focusing on wealthy buyers.

Cox Auto measures the change in the new car market between December 2017 and December 2022. The study focuses on more affordable vehicles priced under $25,000 along with vehicles priced above $60,000, which is typically outside the price range of the average American shopper.

Subscribe to Kiplinger’s Personal Finances

Be a smarter, better informed investor.

Save up to 74%

Sign up for Kiplinger’s free e-newsletters

Earn and prosper with the best expert advice on investing, taxes, retirement, personal finance and more – straight to your email.

Earn and prosper with the best expert advice – straight to your email.

(Image: Cox Automotive)

In December 2017, Cox measured 36 models with an MSRP under $25,000. Then, cars under $25K accounted for 13% of total new vehicle sales, with 204,593 sold. By December 2022, only 10 models with an MSRP under $25K remained on the market, with 43,557 sold – a share of just under 4%.

Leave a Comment

Your email address will not be published. Required fields are marked *