On average, used car prices rose year over year by 2.4% from 2016 through 2019. Then the came the Corona Virus. U.S. factories shut down less than a week after COVID-19 was declared a pandemic on March 11, and slowly began reopening in June. As supplies of new cars fell, buyers were pushed into the used car market.
Based on Kelley Blue Book and CarMax numbers, the average cost of a used car today is $22,000. That’s up 17% from 2016. The growing crowd of used car buyers drove up prices.
As manufacturing plants continue to open and replete the inventory of new cars, this trend should begin to retract. But one thing we have learned in the year of 2020 – nothing is normal or as expected.