Even as dealer inventory has been gradually increasing, used car prices continue to climb, and lower-cost options are becoming harder to find.
According to JD Power, the average price of a used vehicle eight years old or newer reached $30,202 in 2024, a 27.6% jump from $23,668 in 2020. As prices rose, the share of vehicles selling for under $20,000 fell sharply from 53% in 2019 to 30% last year.
Supply chains have largely recovered since the pandemic, allowing dealer inventories to grow. However, the mix of vehicles entering the market has shifted toward higher-priced models, keeping overall affordability under pressure. Used-vehicle wholesale prices also moved higher again last month.
Changing preferences in the new-car market are another factor. SUVs and pickup trucks continue to dominate, while sedans — typically the most affordable option — accounted for just 17% of new-vehicle sales last year, down from more than 40% in 2015.
With the average new vehicle now priced at $49,191, used vehicles remain the more realistic option for many buyers. Financing, however, adds a significant burden. Interest rates on used-car loans are often higher than for new cars, increasing the total cost.
Data from Experian show that in the third quarter of 2025, buyers with credit scores between 501 and 600 faced an average used-car loan rate of 19%, compared with 7.43% for those with scores between 781 and 850.
Figures from Edmunds indicate that the average used-car loan in January was $29,364 with a 10.5% interest rate. Spread over about 70 months, that results in a monthly payment of $551 and total interest of $10,339, bringing the total amount paid to $39,703 — about 35% more than the original price.
There may be some relief this year. Vehicles coming off lease — boosted by higher leasing activity in 2023 — are expected to increase supply, and rental and commercial fleets that shrank during the pandemic are returning to the market. Discounts on new vehicles by automakers could also help ease used-car prices.
Experts advise buyers to research carefully before making a purchase. Choosing a manufacturer-certified used vehicle can provide a newer model with warranty coverage. Checking vehicle history through services such as Carfax or AutoCheck, and comparing trade-in values across multiple dealers, can also strengthen negotiating power and reduce overall costs.
BY HOONSIK WOO [woo.hoonsik@koreadaily.com]
