Used car prices continue to climb, but you can still save
Aug 30, 2022
4 min read
What we'll cover
Learn how to navigate used car prices
How to expand your search location to find the right car
Financing options to consider
Buying a used car is a like a scavenger hunt. Instead of following a straight line from point A to point B, you might zigzag from one used car website to a local dealership to a dealer in the next town over to Craigslist, in your quest for the right vehicle. And these days, that path may look even more twisty.
Global supply chain issues and continued inflation have slowed down new car production while driving up the costs of used vehicles. In fact, prices for used cars and trucks are up more than 6% compared to last year.
Higher prices may mean your vehicle budget won’t stretch quite as far as it could in the past. But you don’t have to get taken for a ride when searching for a used car.
Get the timing right
Because the spike in used car prices is partially driven by an imbalance between supply and demand, you may not be able to afford taking a wait-and-see approach. More buyers than vehicles means cars can get snatched up quickly in today’s market, especially those at lower price points.
One strategy for getting the car you need at a price you’re prepared to pay? Be impulsive — but within reason.
For example, say your budget is firm at $20,000. If you find a car that meets most of your criteria at or below that price, you may want to make a move ASAP. Still, that doesn’t mean you should purchase a used vehicle that totally doesn’t fit your needs just because the price is right. And if your ideal car is way out of your budget, you might need to continue shopping around or reconsider what you really need in a vehicle.
Open up your search location
It makes sense to start your car search at dealers closest to you. But when vehicles are selling fast, you might want to expand your search to find the right car at the right price.
Shopping for used cars online can make this easier. If you find a car you like, do your research beyond a seller’s website. Check the make and model’s safety ratings. Read reviews from people who've purchased the same type of car. And if a Carfax report isn't listed, reach out to the dealer.
Keep in mind, you may not have a chance to do a physical inspection of the car or test drive it. And trading in a used car or getting financing could be more of a hassle, especially if you’re buying from somewhere far from home. But you may be able to have your new-to-you car delivered. So be sure to weigh the pros and the cons if you shop online.
Track prices and consider lower-demand models
Depending on which vehicles are most in-demand, you may discover significant differences in prices by tracking the costs of individual models.
For example, if more buyers are chasing after trucks or SUVs, that could open the door for you to get a deal on a sedan or minivan. If those types of vehicles aren't moving as quickly, dealers may be incentivized to offer price cuts to get them off the lot.
Vehicle year can also influence what's available and what you'll pay when used car prices are climbing. It’s probable that cars five to seven years old, for example, would come with lower price tags than those just three or four years old.
You might have to make trade-offs in terms of your wants, but it could be worth it to trim hundreds (or thousands) off what you pay.
Be willing to compromise
If getting the best price on a used car is your number one goal, things like color or added features might take a back seat. Consider what you require most from a used vehicle and ask yourself whether a different color or higher mileage is a dealbreaker. If the answer is no, you may find a wider range of cars to choose from. You don’t necessarily have to sacrifice all the wants on your car buying list, but a little compromise could go a long way.
Compare financing options
Aside from shopping around for the right used car, it’s also important to consider your financing options. With Ally Auto Personal Vehicle Financing, for instance, you can get flexible terms to fit almost any budget. If you haven’t started exploring your options for financing a used car yet, take the first step and find a dealer near you. That way, you can feel confident about your auto financing, regardless of the car you choose.
Buy your best used vehicle
Purchasing a new-for-you car is exciting, though today’s higher-than-normal prices can make navigating the experience more of a twisted road than a straightforward one. By staying flexible about your wants and vigilant about price changes, you can score a ride that fits your needs (and your budget, too).