According to a recent study, the average price of a used car between February and July 2021 was $24,710. This falls in line with trends that we've seen pre and post COVID. The average amount financed with our network of special finance dealers was $22,552 pre-covid.
Rates on the Rise
Rates for cars began climbing in 2020 after both new and used car sales took a pandemic plunge. The post-pandemic economy has done nothing so far to slow that trend. Among our network dealerships, the average amount financed had climbed to $23,844 by early 2021.
A recent study from iSeeCars looked at 8 million used auto buying experiences between February and July 2021, to find the most popular vehicles and the average cost of buying a used car across America. The average price of a used car sits at around $24,710 according to their data.
As has been the story with most of this year's vehicles, the global chip shortage is driving up the price of new cars, and leaving some would-be buyers priced out. These consumers turned their attention toward the used car market, which drove up prices there, too.
Highest and Lowest Used Car Rates
If you need to finance a used car, you're likely to want a deal, but since the average price of both new and used cars remains high, you may have to search for it. In some cases, going to a different state to purchase a used car can save you money. In some states, average used car costs are closer to the median – Rhode Island and Utah sit just above, Colorado and Oregon, just below.
Other states, however, take the cake as the most and least expensive places to purchase a used car.
The five states with the lowest average cost of a used car are:
- Indiana – $21,961 (11.1% below the national average cost)
- Ohio – $22,244
- Connecticut – $22,528
- Virginia – $22,618
- Kentucky – $22,995
The five states that pay the most for used cars on average are:
- Alaska – $29,656 (20% above the national average)
- Wyoming – $29,419
- Montana – $27,303
- Arkansas – $27,123
- Idaho – $26,662
Remember, even if you get a good deal on a car in another state, taxes are paid to the state the vehicle is registered in (your home state).
Could Used Car Sales Be Slowing?
According to KBB.com, there's been a drop in used car buying – sales fell to 3.1 million in July, down from 3.2 million in June of this year. Whether or not this sales slowdown signals things to come is yet to be seen. Sales may simply be declining because high prices are pushing some buyers out of the market.
If declining sales continue, it could herald a price drop in the used car market. But, so could a sudden uptick in new car production, shifting the higher-end used car buyer back to the new-car market. When used car prices do start to fall, it's likely to be a few months behind the curve of slowing sales.
Is Now the Time to Buy?
If you're looking for a used car, we want to help at CarsDirect. Our nationwide network of special finance dealers is signed up with lenders that can help borrowers in many types of credit situations. Whether you've got good credit, no credit, or past bankruptcy a special finance dealership could be just the ticket.
Sign up today with our free auto loan request form, and we'll get to work connecting you to a local dealer. Don't hesitate, get started now.
