Used Car Market Dominance Persists as Prices Near $26K
Event summary
- Used car sales in the U.S. reached 37.4 million units in 2024, more than double new-car sales.
- Average used vehicle price stands at $26,000 nationwide, with affordable models under $15,000 scarce due to limited supply.
- Pandemic-era production shortages continue constraining used car inventory and elevating prices.
- Mercury Insurance highlights safety features, vehicle history, and insurance costs as critical factors in used car purchases.
The big picture
The used car market has become the primary entry point for American drivers, driven by high new-car prices and persistent inventory shortages from pandemic disruptions. Mercury Insurance's guidance reflects broader industry trends toward value-conscious purchasing and heightened awareness of vehicle history and safety. With 37 million units sold annually, this segment represents a critical battleground for automakers and insurers alike.
What we're watching
- Inventory Constraints
- The pace at which used car inventory recovers will determine price stability and affordability.
- Consumer Priorities
- How shifting buyer focus toward safety features and total cost of ownership affects market segmentation.
- Economic Factors
- Whether tax refund season can sustain demand for used vehicles amid rising prices.
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