The Record Amount of Money You Can Now Save on a Used vs New Car

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If you’re in the market for a car and are on the fence between buying new and used, you should know that the previously owned market has never looked better. 

Inflation data and a new industry analysis show a large and widening gap between the price of new and used cars, when just a few years ago, both were so high that they kicked America’s inflation crisis into high gear. 

GOBankingRates took a look at the record amount of money you can save when you purchase a used car compared to a new car.

Previously Owned Price Plummet While New Cars Hold Steady

According to The Wall Street Journal, the price of new and used cars rose so steeply so quickly in 2022 that the auto industry played a lead role in the steep inflation that defined 2022.

Inflation has since subsided, but it hasn’t fallen evenly in the auto sector. Data from the most recent Consumer Price Index, which economists use to measure inflation, shows that prices in the used market have cooled much more significantly than those of new cars.

Edmunds crunched its internal transaction and survey data and found a historic gap between the price of new and previously owned vehicles. 

According to the company, the average transaction price of a new car has held steady at roughly $47,000 for the last two years. On the other hand, the average price of a used car fell by more than 6% in the first three quarters of 2024 alone to just $27,000.

Most of the reason that used car prices have fallen so quickly is that there are more vehicles on the market, in general. On top of that, people are driving their cars longer, which pushes up the average age of vehicles on the road.

20,000 Reasons To Buy Used — Or Maybe Even 23,124

Edmunds reports that the $20,000 gap between average new and used car transaction prices is the biggest gulf that has ever existed. It had been closer to $15,000 until recently.

However, even that estimate might be conservative. 

Kelley Blue Book (KBB), the gold standard in automobile valuation, recently released data showing the average used car cost $25,499 in October compared to $48,623 for new cars.

That’s a gap not of $20,000, but $23,124 in the difference between average prices on the two markets.

Just don’t expect the cost of owning a used car to be any better than you remember. According to Edmunds, repairs, insurance and maintenance have all become more expensive.

First-Time Buyers and Late-Model Deal Hunters Are Faring the Best

Edmunds data shows that two price spectrums are leading the charge toward the used market.

The sub-$10,000 range is the market’s most competitive price band. Those vehicles — typically claimed by first-time buyers with no trade-ins — sell within their first month on the lot and are an average of 11.5 years old. 

More than 50% of all used vehicle transactions were in the $15,000 to $30,000 range. This segment includes a wide swath of buying conditions and exposes consumers to much newer vehicles, the average of which is four years old and has 50,400 miles on it. 

This price point is also popular because it absorbs shoppers who were priced out of the new market and deal seekers willing to buy used if the deal is right.

Either way, one thing is clear — it’s never made more sense to forgo a new car in favor of a comparable used model.

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