It's much harder to find late-model cars under $20K in 2023, study says

Used-car shoppers who want to purchase a late-model vehicle for under $20,000 will need a time machine.

Four years ago, sub-$20,000 cars made up nearly half of options in the pool of 1- to 5-year-old used inventory. Those vehicles now make up a scant 12 percent, according to an iSeeCars.com used-vehicle pricing study published this month.

It is evidence of the scale at which used-vehicle values appreciated over the last few years as the scarcity of new cars drove more consumers into the used-car market, iSeeCars.com Executive Analyst Karl Brauer said.

The surge in demand "pushed up prices big-time," Brauer told Automotive News.

ISeeCars.com, a vehicle search engine and data research company, found the average price of a 1- to 5-year-old vehicle jumped 48 percent to $34,491 in 2023 from $23,351 in 2019. The company said its study analyzed more than 10.8 million 1- to 5-year-old vehicles sold between January and July 2019 and January and July 2023.

The study also found that prices of three bestselling 1- to 5-year-old models rose more than that average over the four-year period.

For instance, the average price of a used Ram 1500 is $42,881 in 2023, up 57 percent from $27,324 in 2019, according to iSeeCars.com's data. The average price of a used Toyota Corolla rose 50 percent to $21,308 while the average price of a Toyota Camry rose 49 percent to $25,537.

Other mainstream late-model cars that no longer average less than $20,000 include the Honda Accord and Honda Civic, the Hyundai Tucson and the Nissan Rogue.

Some specific models saw more drastic price appreciations because consumers had more confidence in them, Brauer said. Buyers realized if they were going to pay more for any used vehicle, it would be one they "had a lot of faith in, for both its near-term practicality and its long-term reliability and quality," he said.

Not only are used-car prices higher for late-model vehicles, but that inventory is returning to market with higher odometer readings, Brauer said.

ISeeCars.com found 1- to 5-year-old vehicles priced at $20,000 or less had an average mileage of 63,457 in 2023 — up nearly 46 percent from 43,541 miles in 2019. Certain price categories had even higher average mileage gains.

Used vehicles priced up to $10,000 had an average mileage of 116,158 in 2023 — an increase of 61 percent from 72,205 in 2019, the study found.

Similarly, the average mileage of used cars priced between $10,000 and $15,000 rose to 84,710 from 47,886, up 77 percent, iSeeCars.com said. The average mileage of used vehicles priced a little higher — those in the $15,000 to $20,000 range — rose to 60,257 from 37,032, up 63 percent.

That indicates consumers are retaining their cars for longer periods and accumulating more miles on them because they either can't afford or don't wish to pay higher new- and used-vehicle costs, Brauer said.

The iSeeCars.com pricing study also revealed that affordable used-vehicle sales fell in the top 50 major metropolitan areas by population.

In Boston and the Manchester, N.H., area, share of sales of sub-$20,000 used cars was 47 percent in 2019. In 2023, that share is much smaller — 8.2 percent.

The area has seen the biggest fall in share of sales of sub-$20,000 vehicles, iSeeCars.com said, while Oklahoma City's share — 48 percent in 2019 and 16 percent in 2023 — fell the least.

The second-largest share decline occurred in Austin, Texas, where half of late-model vehicles sold for less than $20,000 in 2019. In 2023, that share is 10 percent. The third-largest decline occurred in the San Francisco-Oakland-San Jose area of California, where share fell from 51 percent in 2019 to 10 percent in 2023.