Price gap between new and used cars breaks record

The average used car now costs $20,000 less than a new vehicle, the biggest price gap on record.

Driving the news: New vehicle prices have plateaued while preowned prices have steadily declined, causing the difference between the two to widen over the last year, according to Edmunds.

• In Q3, the average new car cost $47,542, while the average used car cost $27,177, representing a record-breaking gap of $20,365.

• That’s roughly $4,000 wider than at the start of 2019, although used car prices remain elevated from pre-pandemic averages by about 31.4%.

Zooming in: New cars are getting more affordable thanks to bigger incentives, even though used vehicles are leading in price declines. However, it doesn’t seem like consumers are taking as much notice.

• Q3 discounts were more than double their average last year, amounting to $1,744.

• Despite this, days to turn (a measure of how long it takes a vehicle to sell) is at a three-year high for new cars, averaging 57 days.

Bottom line: While new vehicles are getting cheaper, price declines have fizzled out, leading customers to ignore the market even with bigger-then-ever incentives. This is driving deal-hungry buyers to focus on used cars, a trend likely to last into the coming months as normalization continues to have a bigger impact on preowned values.

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