A national study reveals that used car prices are skyrocketing and making it difficult for buyers to find recent models under $20,000.
However, there appear to be more cars in that segment in the Fresno market — especially if buyers don’t mind one with 100,000 miles or more on the odometer.
But, regardless of where you live, inflation has pushed interest rates on used-car financing to the highest level since 2008, according to Edmunds. Locally, the EECU is offering rates starting at 6.37% for new vehicles and 6.64% for preowned vehicles.
In its recent study, iSeeCars compared the cost of 10.8 million 1-to-5-year-old vehicles sold between January and July of 2019 and 2023. The data indicated a significant decrease in used cars sold for less than $20,000. Additionally, vehicles valued between $15,000 and $20,000 decreased by 58.9% from 2019.
Meanwhile, preowned vehicles priced at $65,000 to $20,000 increased by 479.1%.
Overall, there was a 74.8% decrease with only 12.4% of 1-to-5-year-old used cars sold for less than $20,000 in 2022.
“In 2019, used car shoppers with a budget of $15,000 could afford over 20 percent of the late-model used car market. Today that budget only gets them access to 1.6 percent of the market,” said iSeeCars’ analyst Karl Brauer.
Fresno Market More Friendly to Under $20K Shoppers
Yet, Fresno car dealers say they aren’t seeing those dramatic price swings. Representatives at local Toyota, Honda, Hyundai, and Chrysler dealerships said they have plenty of used cars available for under $20,000. In fact, vehicles priced below $20,000 make up 13% to 41% of the local dealerships’ pre-owned inventory, with Hyundai offering 88 vehicles priced less than $20,000.
Still, iSeeCars reports a 74.9% drop in used car sales under $20,000 in the Fresno-Visalia area — the 24th largest drop among the top 50 U.S. metro areas in the United States.
The study also researched the mileage of sold used cars being sold. Automobiles priced $15,000 to $20,000 saw a 62.7% rise in mileage, pushing the average to 60,257 miles.
Many preowned cars available locally have even more miles, often eclipsing 100,000.
People Piled on the Mileage During Pandemic: Analyst
“During the pandemic lockdowns one of the few things people could still do was take a drive,” said Brauer. “This drove up the mileage across the used car market, but the supply of new and used cars was so constricted that the additional mileage didn’t hurt used car prices – they still went up.”
iSeeCars studied price changes in the best-selling cars nationally under $20,000 including the Honda Accord, the Toyota RAV4, and the Subaru Crosstrek. The number of these models in this price range decreased by more than 90%.
Late-model Accords, which now comprise just 3.9% of models available under $20,000, were available at local Honda, Hyundai, and Toyota dealerships. However, only Honda offered Accords at this price with mileage under 100,000.
A Honda representative shared that while they don’t struggle to obtain these vehicles, those with lower mileage in this price range sell quickly, sometimes the same day they come to the dealership.
