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The price difference between new and used vehicles is now a fraction of the overall cost
THE American auto industry’s affordability crisis has officially bled into the one safe haven prospective purchasers had left.
The used car market has been hit so bad that, at times, it makes more sense for prospective purchasers United States to buy new instead.
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The average price of a used car in America has risen to its highest point in 18 months to a value of just under $25,000, an increase of around $1,300 from a year-and-a-half ago.
For popular vehicles like the Honda Civic, Toyota Corolla Cross, Kia Seltos, and Ford Bronco, this translate to their 2023 models holding a value that’s within about 10% of their 2025 counterparts’ MSRPs.
Typically, cars with this amount of time between them would have a 40% difference in value, significantly higher than contemporary margins.
As with many other ongoing issues in the auto industry, such as the average price of a new car exceeding $50,000 for the first time in American history, the issue can be traced back to the Covid-19 pandemic.
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“Not enough new cars were being produced at that time. If you fast forward five or six years, certainly, there’s not a lot of used cars circulating around the market,” said Carfax Director of Public Relations Em Nguyen to local ABC affiliate WCPO.
This has resulted in current used car numbers remaining below pre-pandemic levels, driving competition in the used car market and increasing prices across the board likewise.
Average prices from Carfax from September and October show the typical 2023 Civic priced at $24,300, while a brand new 2025 model has an MSRP of $27,400.
A 10% down payment on a 72-month payment plan, with “great credit,” could result in a buyer paying just $25 more each month for the new model, or $397.
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Purchasing the new car also comes with added benefits such as having nearly zero miles on it, having more features utilizing newer technology, and a full factory warranty.
While this gives prospective purchasers the advantage in terms of getting in new entry-level vehicles for relatively good prices, this unique situation is unlikely to last.
“It’s rare for used and new car values to be this close,” said Carfax Editor-In-Chief Patrick Olsen in a press release. “Potential buyers should do their research and act quickly if they’re considering getting a new car; these price gaps won’t last forever.”
Some dealerships can even offer rebates and low APRs that further highlight buying new as the better option, as foreign a concept it may be to motorists used to pinching pennies on car purchases.
When looking to buy a used car, U.S. News & World Report experts have a few tips before walking onto the sales lot.
Source: U.S. News and World Report
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