Affordable used cars under $20,000 are becoming increasingly rare in Los Angeles, with listings dropping to just a quarter of what they were six years ago, according to a new market report.
A recent analysis by iSeeCars, an automotive research firm, found that only 13 percent of three-year-old used cars sold in the Los Angeles metro area during the first half of this year were priced below $20,000. That figure is down 76 percent from 2019, when 53 percent of used cars in that category met the threshold.
The drop reflects a broader increase in used car prices. As manufacturers continue adding more features to new models, sticker prices have climbed, pushing up the cost of used vehicles as well. In LA, the average price of a three-year-old used car rose from $23,200 in 2019 to $33,200 this year — a $10,000 increase, or 43 percent.
Jay Jang, vice president at Eden Motor Group, explained, “The rise in used car prices is largely due to automakers steadily raising MSRPs. On top of that, many drivers are holding on to their cars longer due to cost concerns, which limits available inventory.”
Karl Brauer, executive analyst at iSeeCars, added, “Production disruptions from 2020 through 2022 due to the pandemic created today’s used car shortage. As a result, buyers now face fewer options and higher prices for lower-quality vehicles.”
Higher auto loan interest rates have also worsened affordability. At this year’s average 7.4 percent rate, a $33,200 used car financed over five years would cost about $660 per month, totaling $39,600 with interest. In 2019, the same car at a 4.6 percent rate would have cost $430 per month, or $25,800 total — a 53 percent increase in total cost. Meanwhile, average wages in LA rose just 32 percent over the same period.
The trend is not limited to LA. Nationally, the share of used cars under $20,000 dropped from 49 percent in 2019 to 11.5 percent this year, a 77 percent decrease. The national average price for a three-year-old used car climbed to $32,600, up $9,400 or 41 percent over six years.
Within California, the decline in affordable used cars was widespread. In Sacramento, the share of sub-$20,000 used cars fell from 51 percent to 12 percent (-77 percent), ranking 26th among major U.S. cities. Other cities saw similar drops: San Francisco from 45 percent to 13 percent (-72 percent), San Diego from 53 percent to 14 percent (-74 percent), and Fresno from 57 percent to 17 percent (-71 percent).
Of the top 50 U.S. metro areas, 33 cities recorded even sharper declines than LA. The largest was Boston, where the share fell from 45 percent to 7 percent, an 86 percent drop. Minneapolis and Hartford followed with 85 percent and 83 percent declines, respectively.
Some cities saw slightly better outcomes. In Miami, sub-$20,000 used cars still made up 21 percent of listings, down 62 percent from 2019. Las Vegas had a 17 percent share (-69 percent), and Orlando stood at 18 percent (-66 percent).
BY HOONSIK WOO [woo.hoonsik@koreadaily.com]
