Used car buyers turn to even older vehicles to save a buck amid rising prices

In yet another sign the new car market remains in an absurd state, new data from Lending Tree released Monday showed car buyers are going to new lengths to nab a set of wheels. Not only are buyers financing larger loan amounts for used vehicles, they’re ending up in older cars compared to past years.

a plane sitting on top of a car: Older cars provide more value, but prices are up in general. Jeff Greenberg/Getty Images

© Provided by Roadshow
Older cars provide more value, but prices are up in general. Jeff Greenberg/Getty Images

According to the data, the average age of a used vehicle Americans purchased in the first two quarters of 2020 hovered around 5.8 years old. Year-over-year in 2021, the age jumped to 7 years flat on average. In some metro areas, the average age of vehicles on which shoppers kicked the tires more than doubled. New Orleans, for example, ranked at the top with potential borrowers shopping 16-year-old cars on average this year. More often than not, older cars cost less, and it’s clear Americans are looking to turn back the clock to land an affordable car. The next data point likely explains why.

The average amount on finance inquiries for a two-year-old vehicle jumped a whopping $5,176. Last year, those shopping financing for a two-year-old car were looking at an $18,298 loan, but today, they’re looking to borrow $23,475 — 28% more. It’s a two-pronged story. As the semiconductor chip shortage continues to hit automakers hard, used cars become more attractive to the companies. GM Financial, for example, won’t let lessees sell their lease to a rival company any longer. Why? They want that car back so a GM dealer can sell it themselves while new car inventories remain low. This makes used cars far more valuable to those selling them.

a large passenger jet sitting on top of a car

© Jeff Greenberg/Getty Images

At the same time, car shoppers hope to land a better deal with a used car since depreciation hits new cars hard. However, with used car values increasing, the deals are few and far between. It explains inquiries for much older vehicles with far cheaper prices.

Many automakers were hopeful the second half of the year would bring a reprieve to the chip shortage, but so far, it doesn’t appear that way. The same advice still stands: it’s not the best time to buy a car, but if you need one, shopping around for the best deal can literally pay off.

These cars are the best to buy used, rather than new. They’re substantially cheaper than a new model, even though the data comes from 2019 or 2020 models sold used. The gorgeous Infiniti Q60 is one of them.

The Mitsubishi Eclipse Cross is over $8,000 cheaper if you nab a used one.

Luxury cars are the better deals, though. A Mercedes-Benz GLA is on average $13,500 cheaper.

The Cadillac XT5 is one of the only used luxury SUVs to make the list, and costs almost $15,000 less on average.

Want a Mercedes-Benz sedan? A CLA is over $13,000 cheaper.

The humble Kia Sorento is nearly $9,000 less expensive.

Another luxury sedan on the list is the BMW 3 Series, which can be over $15,000 cheaper.

The lovely Nissan Sentra can be a steal used with a $6,000 discount over a new model.

The Hyundai Santa Fe in used form can slash almost 30% off the manufacturer suggested retail price with a $9,000 discount.

Another luxury sedan, the Infiniti Q50 can cost $16,000 less if you shop used.

Hyundai’s Sonata is ripe for big discounts used with nearly $10,000 off the retail price.

A Ford Mustang is another good buy used with an average of $13,000 knocked off the price from a new model.

The other luxury SUV is the GMC Yukon Denali, which can cost nearly $23,000 less.

A BMW 5 Series might be in the budget with nearly a $25,000 saving over a new one.

The Mitsubishi Mirage G4 is already affordable, but a used one can take nearly $5,000 off the price.

15/15 SLIDES

This was originally published on Roadshow.

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