Fifteen years ago I bought my first car for $4k, exactly what I thought the used car price sweet spot was at the time. It was a good, basic Honda Civic with 87k miles on the odometer. It lasted a good 90k more until it was totaled by an errant tractor-trailer.
Fast forward to today and I still think the sweet spot is right around $4k for basic transportation. But the price of the average new car has risen considerably since then. It’s now somewhere in the region of $28,000.
Interesting. New car prices higher, the price of solid used cars is still the same. What does this tell us?
It tells us that new cars are depreciating more, on a dollar basis, than before and that used car deals continue to improve. And that means new cars are more expensive to own than before, which could be one key reason why used cars are more popular than ever before.