Used Car Prices Climb To Pandemic Levels Once Again

As of the time of this writing (yesterday morning), AAA said the average cost of a gallon of gas is $4.32 a gallon, while diesel averages $6.23. That's the most expensive diesel has ever been, and for the first time ever, the national average gas price stayed above $4 a gallon for the entire month of August. If you've been thinking about replacing your gas guzzler with something more efficient, though, you could be in for a shock when you get a look at used car prices, since Kelly Blue Book reports that used car prices are back to pandemic-era levels.

According to KBB's listing data, the average used price hit $27,239 in the month of August. That's the highest it's been since December 2022 when the industry was still facing serious COVID-related shortages, and used car values shot through the roof. Today, we aren't dealing with a deadly global pandemic interrupting supply chains anymore, but the same problem with supply not keeping up with demand. 

In fact, the supply of available used cars is even lower than it was in August 2022. Back then, dealers had about 2.42 million vehicles listed for sale. Today, that figure has dropped to about 2.13 million. So while we tend to see used car prices flatline or drop in late summer, the lack of supply is pushing prices up instead. 

The pandemic didn't just kill more than a million people in the United States. The supply chain interruptions led automakers to build about 8.1 million fewer cars during the pandemic than they would have. Cars that never got built can't be sold new, which in turn means they'll never be sold used, either. As KBB put it, "That shortage will ripple through the used-car market for years to come."

The bigger issue isn't necessarily the total lack of used cars, though. Instead, it's the lack of affordable cars. Dealers are reportedly sitting on a 44-day supply of pre-owned vehicles, but their supply of sub-$15,000 cars is much more limited, with dealers currently only having access to a 29-day supply. So that's not exactly ideal. 

If we all got regular raises, that would be less of a problem. Unfortunately for those of us who work for a living, corporate profits recently hit a new record high at the same time that workers' share of the profits hit a new record low. Our employers are making plenty of money. They'd just rather keep it for themselves instead of paying us enough to live on. You may not be able to afford a basic used car anymore, but imagine how much worse it would be if your CEO couldn't afford a seventh Porsche. The country would collapse into chaos, and we definitely can't have that.