The Decline of Affordable Used Cars in Southern California
In recent years, the search for affordable used cars in Southern California has become increasingly challenging. A study by iSeeCars highlights that the availability of 3-year-old vehicles priced under $20,000 has plummeted dramatically since 2019.
The Numbers Tell the Story
According to the research, only 13% of used car sales in Southern California this year were for vehicles under $20,000. This is a significant decline from 53% just six years ago, representing a 76% drop in the market share of budget-friendly cars. The average price of a 3-year-old used car has surged by $10,000 since 2019, reaching around $33,200, a staggering 43% increase.
What Contributed to This Trend?
Karl Brauer, an executive analyst at iSeeCars, attributes this situation to the pandemic affecting new car production between 2020 and 2022. The shortage in production has led to fewer available vehicles in the used car market, forcing buyers to opt for older models that generally come with a higher mileage.
The Impact on Buyers
Today’s car buyers are also facing higher auto loan rates, which further complicates their situation. For instance, someone financing a $33,200 used car at the current 7.4% interest would spend about $660 a month over five years. To compare, six years ago, a similar vehicle with a price tag of $23,200 at a 4.6% interest rate would cost only $430 a month. The total expenditure for the former vehicle would be $39,600, while the latter would be $25,800, marking a 53% increase in financial burden.
National Trends
This problem is not unique to Southern California. Nationwide, the availability of used cars priced below $20,000 has also dwindled. Only 11.5% of used car sales across the U.S. this year fit that description, down from 49% in 2019—a 77% drop.
Comparisons Across Cities
Several cities in the U.S. have witnessed even more severe declines. For instance, Boston saw its bargain car sales drop from 45% to just 7%, while Minneapolis also experienced a significant decline. Cities like Miami, Las Vegas, and Orlando are comparatively better for budget shoppers but still show reductions in affordable options.
What Can You Do?
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