Used car prices have jumped more than $9,000 in the past seven years

The study also found that only about one in nine three-year-old used cars costs less than $20,000, compared with nearly half in 2019.

While this will definitely cost purchasers less than a new car, it’s still a pretty steep amount for a used vehicle.

Why have prices gone up so much?

The car market is still feeling the effects of the pandemic, which initiated a semiconductor chip shortage that AlixPartners estimated cost the automotive industry $210 billion in lost revenue. These supply chain gaps have lingered and new factors have played their part in the price increase too.

For instance, auto tariffs have driven up manufacturing costs and disrupted cross-border supply chains, with levies on steel and aluminum, car parts and vehicles shipped in from Mexico and Canada having a big impact.

In a July 21 quarterly filing with the Securities and Exchange Commission, General Motors estimated that President Donald Trump’s tariffs will cost them between $2.5 billion and $3.5 billion this year. That’s no small sum.

Buy older if you want to pay less

All hope is not lost if you’re keen on purchasing a car. But if you don’t want to spend all your savings on it, you’ll need to look for a much older vehicle.

ISeeCars reported that the age at which most used cars are priced under $20,000 has shifted from four to seven years. Despite the fact that 54.1% of four-year-old vehicles were priced under $20,000 seven years ago in 2019, used car shoppers in 2026 will need to aim for a seven-year-old vehicle if they plan on spending less than $20,000.