Many used car shoppers are facing sticker shock right now.
As a result, you might want to consider looking at new vehicles as well, as fresh data reveals used car prices have reached their highest point in 18 months.
“The bottom line here is don’t just assume that the used car is much cheaper than the new car,” said Em Nguyen, director of public relations at CARFAX.
Ian Tyree and Layla Mason recently experienced this firsthand while struggling to find an affordable used car.
“It’s crazy,” Mason said about the current market conditions.
WATCH: Car buyers and a dealer talk about ways to find an affordable car:
Price gap between used and new narrows
New research from CARFAX shows used car prices are averaging just under $25,000, marking an 18-month high.
The surge stems from a shortage of used vehicles that can’t keep up with current demand — a lingering effect from the pandemic.
“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,” Nguyen said.
Typically, a 3-year-old car would have lost about 40% of its value by now.
However, popular vehicles like the Honda Civic, Ford Bronco and Toyota Corolla Cross are seeing 2023 models priced within about 10% of their 2025 counterparts.
“It’s very rare for that new car value and that used car value to be so close,” Nguyen said.
Using average prices listed by CARFAX, here’s an example of when buying new might make sense for your budget:
With a 10% down payment, and monthly payments over 72 months, a buyer pays just $25 more per month for the newer model ($372 a month for the used 2023 Civic versus $397 for a new 2025 Civic).
Potential benefits of buying new
The narrow price gap makes new cars increasingly attractive, especially considering new vehicle loans typically offer lower interest rates.
New vehicles also come with updated features and full bumper-to-bumper factory warranties.
At Jeff Wyler Nissan, manager Graham Wyler said low APRs and $2,500 rebates make several new Nissans a better deal than used alternatives.
“A 3-year-old used car might be only a few thousand dollars cheaper than a new car. So, our question is why buy used when you can buy new?” Wyler said.
Jeff Wyler customer Braven Griffen took that advice to heart.
“We chose to buy new. Just a thousand dollars difference, for 14,000 miles felt like a deal to us,” Griffen said.
If you need to start car shopping, compare new and used prices carefully.
You may be surprised to find that in some cases, if you buy new, you don’t waste your money.
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This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
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