Why Are Used Cars So Expensive Nowadays?

Buying a car is a stressful process, and one of the first questions many people ask is why are used cars so expensive. The whole process consists of several stages. First of all, you have to determine the budget. Then, choose the model that fully meets all your requirements, conduct a pre-purchase inspection, and only after this make the final decision. No matter the budget, you will notice a big change in today’s auto market. Prices for both new and used vehicles reached sky-high.

The main curiosity can be why used cars are expensive. Below, we will analyze the reasons for the change in vehicle prices. Also, we will find out why used cars are so expensive right now in 2025 and review changes in new car prices.

What Is the Used Vehicle Cost Trend and Why Are Used Cars So Expensive Right Now in 2025?

You will hardly find any person who has searched for a vehicle and didn’t mention that prices on used cars are extremely high. This is happening in a lot of markets right now. It has several explanations. We will discuss the reasons why used cars are so expensive currently. Until then, I’d suggest reviewing statistical data for a better understanding of the trend. With the help of statistical data, we can compare current and previous trends and see whether prices are truly so high or not.

​Unsurprisingly, several statistical data points demonstrate that used car prices greatly fluctuated in recent years. For instance, the average used car price in America was $27,147 in June 2023, showing a slight decrease of $109 from May 2023. To make things even more interesting, by June 2024, the average used car price had declined to $25,251, down about $400 from May 2024 and more than $1,700 lower than in June 2023. These shifts have made the question of why used car prices are so high particularly pertinent for potential buyers.

Signs of changes in price trends

Used car prices have hit the highest record in 2021. However, there are signs of shifts in price trends. After several years of steady increases, prices are now showing a gradual decline.

According to the US Bureau of Labor Statistics, the Consumer Price Index (CPI) for used vehicles and trucks declined by 3.3% between December 2023 and December 2024. This was a major change from the earlier increasing trend. The price index fell 1.0 percent in August 2024 alone, indicating that the market is continuing to decline. However, prices remain unstable, with the used vehicle and truck index rising by 0.9 percent in February 2025.

Plus, according to Edmunds, the average transaction price (ATP) for used vehicles fell to $27,472 in Q2 2024, down from $29,742 in the same quarter in 2023. This drop is a clear indication of a market correction after the post-pandemic boom. In addition, the average age of trade-ins has risen, showing that buyers are keeping their vehicles for longer. In Q1 2024, the average trade-in age increased to 9.4 years, up from 7.9 in Q1 2022.

After reviewing statistical data, it is obvious that prices are increasingly high, but there are several factors that explain why car prices are so high.

Why are used cars so expensive in 2025?

Used cars are so expensive in 2025, mainly due to the ongoing imbalance between supply and demand. The automobile market is still recovering from disruptions caused by the COVID-19 pandemic, a global microchip shortage, and changes in consumer behavior. With fewer used cars available and more buyers competing for them, prices remain high.

Now, after reviewing all the statistical data that shows the tendency for price increases, let’s thoroughly explore why are used cars so expensive right now. You might think that the Covid-19 pandemic is the main factor that affected price increases. Even so, other significant details should be taken into account.

The Covid-19 pandemic

Number one and the most outstanding reason that affected the price increase is the Covid-19 pandemic. Due to the pandemic, many individuals moved to private vehicles instead of using public transportation. For that reason, demand for vehicles has significantly increased. Besides, the selling of used vehicles has lowered.

Due to high demand and uncertain situations, many individuals avoided selling their vehicles. As a result, there was less supply, which made the demand higher. That is one of the main reasons why used cars have been so expensive till now.

The global shortage of microchips

New automobiles contain dozens of tiny microprocessors. These tiny components are responsible for controlling everything from engine timing to cabin temperature. At the beginning of Covid-19, when the demand for personal electronics increased, the limited number of chip factories was busy. As a result, chipmakers couldn’t supply the demand quickly enough.

If you are wondering why are used cars so expensive the shortage is one of the reasons. Automobile factories have slowed, and the automotive industry has been severely impacted. It has delayed the release of new vehicles and, in some cases, even paused the production of certain models. Limited supplies of computer chips continue to prevent carmakers from returning to normal production

Rental car companies

Surprisingly, rental car companies are one of the factors that affect a price increase. The reason is that due to the pandemic period, rental companies had to sell about a third of their fleets. After the rebound in travel, rental companies face a shortage of vehicles to rent. For this reason, rental companies avoid selling vehicles, as their supply is still low. Thus, one of the main sources of used vehicles has stopped temporarily.

Why are used cars so expensive right now while new vehicle prices have gone down?

After clarifying the main reasons behind the price change, let’s discuss another outstanding topic. The trigger question is, why are used cars so expensive when prices on new vehicles are going down? In general, the prices of new vehicles have always been higher than those of used ones. However, iSeeCars.com’s latest analyses reveal different results. The company has analyzed over 470,000 new and used vehicles listed for sale in June 2021. As the results show, ‘the price gap between new and slightly used cars has drastically narrowed, and some used cars have even become more expensive than their new versions’. About 16 used vehicle models cost more than the new versions.

The highest difference between new and used vehicle prices is in Kia Telluride. Surprisingly, 8.1% more for a lightly-used model costs 8,1% more expensive than the new version. The issue is that, as dealers mention, some potential buyers are ready to pay a bit more than to wait for the newer version, as the demand for vehicles is surprisingly high.

How to choose and maintain a used car properly

There are various things to consider when choosing the best option. One of the most common for everyone is mileage-related data. It’s not surprising because drivers can make reasonable conclusions based on this data. For example, some people make decisions based on this information. When they find that the mileage is too much, they may change their decision. No matter if you are a seller or buyer, you may once think about mileage correction tools to alter mileage-related data at your will. We do not recommend using them for deceitful purposes.

When it comes to testing the automobile and showing off its abilities, you may come across the problem of adding unnecessary miles. It can be undesirable and irritating for you because the automobile depreciates quickly. With the question of why are used cars so expensive right now in your mind, it becomes even more critical to avoid any actions that could reduce their value. We offer you the best solution for it, namely a Mileage blocker that can stop the mileage recording process untraceable. It will help you to test your auto in a controlled environment. Remember, it is illegal to deceive potential buyers. A Mileage blocker is an ethical tool that offers you flawless performance at any rate.

So, if you have already chosen the secondhand auto, start thinking about quality products to purchase with proper installation and technical support. Our team is ready to provide you good costumer service.

Conclusion

Why are used cars so expensive right now? To sum up, the main reason for the price increase in used vehicles is the gap between demand and supply. Several factors contribute to this change, including the COVID-19 pandemic, the global shortage of microchips, and the impact of rental car companies selling off their fleets. Despite fluctuations and increases in price, the trend often shifts. Therefore, stay updated and follow new trends that may affect the prices.