Over 30 used car models have become unaffordable to the average American over the past three years, according to a new study.AP
STATEN ISLAND, N.Y. — Rising vehicle prices observed in recent years have made some of the country’s most-popular used cars, like the Toyota Camry and Honda Accord, unaffordable for the average American.
In recent years, the ongoing microchip shortage has limited the production of new cars, resulting in low levels of inventory. This has prompted an increase in the demand for used vehicles, which has caused prices to skyrocket.
A new study from automotive research firm iSeeCars.com analyzed used car sales data and median household incomes to see which used cars have become unaffordable over the past three years based on the site’s Car Affordability Index.
“From August of 2019, well before the pandemic lockdowns started, to August of 2022, new car prices increased by almost 29%, and three-year-old used car prices increased by 52%, but incomes increased by only 13%,” said iSeeCars Executive Analyst Karl Brauer.
Researchers consider used cars affordable if annual payments do not exceed 10% of the median household income, based on typical 36-month loan rates.
Based on the researchers’ criteria, a used car must cost $25,542 or less to be considered affordable.
“People still need to replace their vehicles, so the resulting drop in affordability means shoppers are either taking longer loan terms and paying higher interest rates, putting down less money for a down payment, or even forgoing the kind of car they originally wanted for a lower cost model in order to make ends meet,” Brauer said.
Ten used cars, including the popular Ford Mustang, Toyota Prius and Toyota RAV4, are more than 20% above the affordability threshold.
“This is yet another indicator of how drastically prices have shifted on used cars in recent years. When you have a used Toyota RAV4′s price going from $20,534 to $32,090 in three years, that’s a clear indicator of affordability lost,” Brauer noted.
Here’s a look at the used car models that are no longer affordable for the average American, according to the data.
1) Toyota Avalon
2) Chevrolet Traverse
3) Volvo S60
4) Ford Mustang
5) Acura TLX
6) Toyota Prius
7) Toyota RAV4
8) MINI Convertible
9) MINI Countryman
10) Volkswagen Golf GTI
11) Nissan Maxima
12) Ford Edge
13) Honda CR-V
14) MINI Clubman
15) Audi A3
16) Subaru Outback
17) Subaru Forester
18) Nissan Frontier
19) Honda Accord
20) Mazda CX-5
21) Nissan Pathfinder
22) Subaru Crosstrek
23) GMC Terrain
24) MINI Hardtop 2 Door
25) Acura ILX
26) Hyundai Santa Fe
27) Toyota Camry
28) MINI Hardtop 4 Door
29) Volkswagen Tiguan
30) Chrysler 300
31) Kia Sorento
32) Jeep Cherokee
33) Jeep Compass
Which color cars maintain their value the most? The answer may surprise you.
The average car depreciates in value by approximately 37.6% over three years, according to a recent study.
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