It's Almost Impossible To Find A Decent Used Car Under $20,000 ( jalopnik.com )

Vehicles under $15k are 1.6% of the market, and their share of the market has dropped over 90% since 2019. The old advice that you can get a beater and drive it in to the ground for $5k hasn't been true for years but it still seems pervasive in personal finance spaces.

some_guy ,

My partner took her 2022 Toyota for service and the dealership offered to buy it off her. The price was only $1k less than she paid new. That’s a year and a half of heavy use for $1k if she opts to take it.

Valdair OP ,
@Valdair@kbin.social avatar

Yup. My wife and I both own Subarus, we get "please let us buy your car!" letters from local dealerships on a monthly basis and have been since we bought hers in 2018.

Speculater ,
@Speculater@lemmy.world avatar

We just wanted all wheel drive two years ago, our Subaru went up in price. It’s silly.

TunaLobster ,

I bought used in December 2020. 6 months later, the dealership called me with an offer $3k higher than the sticker price I saw. It was madness for a while!

Coolkicks ,

Increased safety features on recent car models are a factor here as well. In the decade before I drove, airbags became standard, and weren’t even required until I’d been driving for a bit.

And over the last 10 years, NHTSA has pushed for stability control, 5 star crash test ratings, etc…

Then the whirlwind of safety over the last 5 years where back up cameras became required, and blind spot monitoring, brake assist, lane keep assist, adaptive cruise control all became available features.

You can still buy a car without those, for sure, and unfortunately that still costs $12k unless you want 200k miles or rebuilt titles.

But as I’m shopping for my kids first car, I find it hard to draw the line on what safety features she can have vs not have, and suddenly a few safety features later, used cars cost $20k. A far cry from my first car that I bought for $1k and drove in to the ground.

Valdair OP , (edited )
@Valdair@kbin.social avatar

For sure a 10-year-old used car in 2023 is massively safer than a 10-year-old used car in 2003. I don't know if that can possibly explain how that 10yo used car in 2003 was $1000 (5% of 20ish k MSRP) and an equivalent 10yo used car in 2023 is $20k (75% of 30ish k MSRP - 20k inflation adjusted from 1993 to 2013). Of course these numbers are vibes based approximations and anecdotal, but it's kind of my impression.

I would think the safety argument is already generally accounted for by inflation - Euro NCAP, NHTSA, etc. has been going pretty strong since the 90s. I don't know if I buy that backup cameras and blind spot monitoring becoming standard in the late 2010s suddenly made cars retain all their value, because new cars got those features but the MSRPs of those cars was basically just increasing at ~the rate of inflation. Also while these cars are getting safer, they're getting much more expensive to maintain, which you would expect to drive down used car prices. It's strange for sure. The pandemic can't bear the entire blame either though, since it was a trend that started before it. 2020 just supercharged it.

NikkiNikkiNikki ,
@NikkiNikkiNikki@kbin.social avatar

The used car market is so terrible where I live that I bought a 1999 Subaru Forester L with a completely trashed engine that could barely make it a block without overheating. I got it for around $200 in "scrap material" (Luckily the title wasn't a salvage yet).

So I completely took the engine apart myself and put in new head gaskets, pumps, belts, electronics and all that noise. I took it as a challenge to myself since my old cars' engine had completely stopped starting and absolutely nothing got it working again, and I had wanted to prove that I could fix a fucked up car. It took 2 months, but I saved so much money not buying an overpriced piece of trash that seems to saturate the used market right now. (Seriously? $6,000 for a beat up 30 year old sedan? Is everyone selling these cars insane?).

And the best part is that the total cost of this Subaru + all the parts needed was 1,700!

To put it in perspective I had found someone selling a 2002 Subaru Forester L for 3,000 on the side of the road. I could probably make a business out of this if I wasn't so slow...

Never did figure out what was wrong with the old car, we just ended up scrapping it because it was a complete lost cause. But if this were pre-pandemic I wouldn't have had to do that at all. I would've just slapped over 2,000 for a piece of garbage that needs some maintenance, and be on my way, no need for scrap diving, brain rotting and time wasting.

vita_man ,
@vita_man@lemmy.world avatar

Luckily, it sounds like you knew what you were doing and had some mechanic experience.

sadreality ,

Going car free is getting more affordable.

Either way, as someone stated above, they are price gouging. Covid taught them that fake shortage works and we will pay so they are milking us.

Housing, food, car, health care...

cassetti ,

Yep, I have a cheap old Honda with low miles that will last me forever with proper care/maintenance. Because I leave it in the garage and bicycle everywhere I need on a daily basis. My bicycle gets more miles than my honda on an annual basis. Burn calories, stay in shape, save gas money and wear & tear on my vehicle seems like a win-win in my book.

I also specifically found a home within biking distance of everything I need on a daily basis so I rarely need to drive to get where I want to go

korstmos ,

A beater for 5k? Ive bought 500$ beaters less than 6 years ago!

500$ nowadays will not even get you a junker with its engine and transmission removed.

uglytruck ,

The used car market is being strongly manipulated by the banks. Their inventory of repossessions has skyrocketed over the past few years, but they are limiting how many are going to auction so not to destroy the market and their margins. I've heard rumblings that with the push for EVs and their costs, carmakers are going to make them a service. You pay a monthly fee to use them and every few years you will get a new one. You will never own one outright. Who knows if this is true or not.

dhork ,

That’s basically a lease. Although it might not be a bad idea to lease an EV. It’s basically a battery with wheels. The battery will die someday, and when it does you may be better off getting a newer car with newer tech vs. replacing the battery in your older one.

TunaLobster ,

It’s so incredibly wasteful though.

Turkey_Titty_city , (edited )

I bought a new car in 2018 for 19K. Everyone I know flipped at me for 'wasting money' and not buying a 5yo+ 10K car that looked like shit with 100K miles.

It's now worth 21K, after 50K miles.

I'm looking at trading it in for a 35K car in the next two years, and watching the value on that car never go down either.

wowbagger_ , (edited )

They definitely shouldn’t have flipped out at you about it, but that doesn’t mean they were wrong. Vehicles almost never appreciate in value; it just so happens that you accidentally timed the used car market perfectly.

Stuka ,

If you expect that to continue happening you’re in for a surprise.

Turkey_Titty_city ,

dude, everyone says the housing market will crash for 15+ year now.

We have to accept the old rules of economy are out the window. govt will bail and stimulate to no need the second the market slows down.

this is the new normal. truth is our inflated economy can't ever allow housing values to go down anymore without causing a depression so the govt won't allow it.

bluGill ,

That is one reason I haven't bought a car in a long time. A car is a tool, they are not worth the price so long as I can keep what I have running.

Xartle ,

Probably not the point of the post, but I’ve found the economics of owning a car in general has changed for me. It actually stopped making financial sense for me to own a car in 2017-18. The pandemic drove it home. We still have one car for the house, but I wouldnt be surprised if it isn’t the last car we buy…

HubertManne ,
@HubertManne@kbin.social avatar

We have had one for a long time but give my wifes medical conditions we will continue to have one. Would love not to though.

Kerensky1101 , (edited )

I’ve been looking for a second vehicle for a while now and used market where I am is selling 15+ year old vehicles with well over 100k miles on them for $15,000 - $20,000. New isn’t much better since I’d be stuck with a monthly payment of anywhere between $600-$800 before insurance

paultimate14 ,

I grew up hearing all sorts of addages about vehicles. “New cars lose tons of value as soon as you drive off the lot, so you’re much better off buying used”.

Once I grew up and started buying my own cars, I learned that the best miles a car has are usually right out of the factory. The sound dampening wears over time. The foam in the seats wears out. Scratches accumulate, colors fade, odors accumulate. Hoses leak, mechanicals fail.

A lot of this can be fixed, or mitigated with proper maintenance. But the ultimate lesson I learned is that the resale value only matters if you actually intend to sell the car while there is still meat left on the bone. I’m fine driving a car into the ground until it’s scrapped, so I don’t factor resale value into my purchasing decisions.

Even back in 2018 I noticed the price gap between new and used cars wasn’t as wide as I remembered it being back in 2011. I ended up with an Impreza with ~12k miles for $17k, but a new one would have been just over $20k. I was strapped for cash at the time, but I wonder if a new car would have been a better value even back then.

SpaceNoodle ,

*adddages

Valdair OP ,
@Valdair@kbin.social avatar

This was exactly the calculus I was doing with my wife in 2017~2018. Her car was a fourth-hand 2003 Hyundai Elantra which had been run in to the ground before she ever even got it (but to be fair, it was both free and better than what she was driving before). I was looking at used car prices and thinking, is it really worth it to save less than $5k when I get a car that's 5 years newer with 50,000 fewer miles and all of its warranty in-tact? The PF advice I was seeing at that time was maddening, and mirrored a lot of what you're saying - "cars lose half their value off the lot, buy a used civic for $5k and drive the wheels off" - but that had already not existed for years. And then the pandemic supercharged used car prices and they just sort of never came back down. And then rates went up and they still won't come down.

We ended up buying a brand new 2019 Impreza in an undesirable color for $19k, financed with nothing down and 0.9%. Now it's paid off, I feel like in retrospect it was very much the right call.

CADmonkey ,

Those PF posts drove me nuts too. And if you pointed out that you got a new car for a little more than a used one, someone would immediately post up how they found a shitty used Civic 3,500 miles away from where I live for slightly cheaper, therefore I was a dumbass for buying a new car.

phario ,

I can tell by your writing that you’re a rational person and you’ve obviously thought about things. But…I’m not sure we’re arguing about the same thing.

The point is that you would previously be able to buy a new car for say $20k or a used one for $5k. The used one might drive nearly as well as the new one, if properly maintained. So you were “saving” $15k.

The idea that brand new items can lose value to their “steady-state” value (imagine a graph that sharply descends in the first year) isn’t an absurd one.

That said, I understand that some people might value that “new feeling” and want to pay that $15k difference. Or might value their time and troubles in potentially dealing with the issues of a used car.

Of course, people are raising the issue that the market might have changed recently. I don’t really follow the pricing of new cars. I remember a few years ago hearing that the car industry was in trouble because essentially cars were lasting longer and longer and so they were unable to keep on selling the new models to suckers.

paultimate14 ,

I don’t know how long ago, if ever, a $20k new car was comparable to a $5k used car.

My first car purchase was in 2009: I got a 2005 Cavalier with ~40k miles for $8k. Cars cheaper than $7k were basically a couple months away from the scrap yard (unless you’re able to fix up a project car yourself, but I think that’s outside of the scope of this conversation). And even then: a $20k car in 2009 was a completely different class of car. A comparable car, the Cobalt, had a sticker price of about $16k. So, anecdotally, that’s a 50% discount in exchange for a car being 4 years old with 40k miles. Even that cavalier was a pretty terrible car that was both a bad experience to drive and costly to repair and operate.

I don’t think today you are ever seeing a $20k car being even remotely comparable to a $5k car. It’s not a $15k difference.

If the % was the same: of the choice was between a $20k new car and a comparable $10k used car, I think thats a close decision. The problem is that comparable used car is costing $17k or more. I think the conventional wisdom of buying used has swung too far and driven up the demand for used cars. I think the average buyer does not adequately factor in both the diminishing driving experience over time/miles and the increased repair costs into purchasing decisions. I also think that resale value is overvalued.

Of course, there’s other economic factors. Some people don’t have the luxury of choosing $20k vs $17k: they’ll take the $17k every time. I’m just talking about the decision making process for those who can make it.

bulowski ,

I’m on the very last life of my current car and I’ve been watching prices. To compare, I bought my current car for 8k. It had 99k miles on it and it has lasted 10 years with no major service other than an A/C compressor.

Granted the market 10 years ago was a lot different, but there is nothing in my area that I would feel comfortable financing for under 20k. At that point I can get a brand new Versa or Corolla for a few grand more. With either of those I get a warranty and brand new components. It’s not even a question which is the better deal.

sugar_in_your_tea ,

Yeah, it’s very much YMMV. I got a Prius for ~$10k w/ <60K miles about 10 years ago, and new models were going for >2x that (I think MSRP was ~$25k). It now has 145k miles and has needed practically no repairs (maybe $2k?). So at the time, used was absolutely a better deal.

Today, a similar car would go for >$20k, and MSRP is similar ($28k-ish). So today, buying new is absolutely a better deal, if I can get it for MSRP (pretty big if these days).

So if I can get more than half of the useful life for significantly less than half of MSRP, used makes a ton of sense. But that’s not really a thing today. Had I bought new when I bought my car, I could probably get $20k+ for it today. I didn’t, so I can only really get $5k or so, but that’s still a great deal given that I put on nearly 100k miles over ~10 years.

I plan to drive my car until it dies, so I’m basically saving $15k or so buying used. If I bought today though, I’d buy new because used doesn’t make financial sense to me.

odium ,

Toyotas and Hondas have pretty huge markups right now. A new Prius for example (in Texas at least) costs 39k (with taxes and everything) for the base trim.

sugar_in_your_tea ,

I’m seeing advertisements for MSRP for both Prius and Civic, so ~$30k for 2023 model years for base trim. This is before taxes, just advertised price, so maybe $35k out the door after taxes, registration, fees, etc.

That said, I haven’t requested a quote from any local dealers, so those advertised prices could be unrealistic. But advertised prices are down from last year.

odium ,

I went in person last month to two dealerships in my area, and they both had over 5k markups.

They also stated ~30k on their website.

sugar_in_your_tea ,

Lame. It’s at least better than a year ago when everything was marked up >$10k.

blueskycorporation ,

Good point, I know you can find metrics on the average mileage cost of a car, including gas, maintenance, insurance, depreciation, etc. But I would be curious to see how those numbers fluctuate throughout the life of the vehicle. That is, what is the marginal cost of a mile, based on the already existing mileage. Based on the vehicle, you could plot the marginal mile cost structure, similar to how you would plot a yield curve.

HobbitFoot ,

Cash for clunkers and other programs killed the used market.

AProfessional ,

That ended 14 years ago.

The car companies just moved up market, nobody cares about affordable cars.

Then inflation didn’t help.

HobbitFoot ,

How old do you think the $5k cars would be if they were on the market?

AProfessional ,

I won’t say it didn’t hurt, but the article is about 15k cars.

Valdair OP ,
@Valdair@kbin.social avatar

They do specifically list out the fraction of the market each price bracket constitutes though. This feels more specifically targeted at the kinds of PF advice that would say to look for a "decent condition low miles" beater for $5k. This shows that segment of the market literally does not exist anymore. The equivalent cars are now $15k+ which has VASTLY outstripped inflation from when I first started seeing that rhetoric (2010 or so).

John_Coomsumer ,

This is not true, the used market was still great pre-covid. COVID obliterated new vehicle pricing and availability, and naturally the used market followed

H3L1X ,
@H3L1X@lemmy.ml avatar

That was definitely my experience buying a car a few months ago. My car was totaled so I had to buy a replacement unexpectedly. I was seeing used cars with 30,000-50,000 miles selling for more than MSRP and new cars were very hard to find. I ended up buying a new car that was less expensive than the used cars I was looking at and ended up getting a much lower APR due to the fact that it was a new car.

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