Used Cars: Still Inflated or Finally Normal?

Thursday, November 20, 2025 | Category: used cars | Trend: ↓ DOWN

The Correction Is Real — But Incomplete

Used car prices were the poster child of pandemic inflation. The Manheim Used Vehicle Value Index soared 45% from early 2020 to its peak in late 2021-early 2022, driven by new car production shortages (chip crisis), stimulus spending, and a rush to personal transportation. A 3-year-old Toyota Camry that sold for $18,000 in 2019 was fetching $27,000 in 2022.

The correction has been meaningful. Prices have fallen about 15-20% from peak, with the sharpest declines in the vehicles that spiked the most — trucks, SUVs, and popular commuter cars. Inventory on dealer lots has recovered to near-normal levels, and new car production has largely normalized, releasing lease returns and trade-ins back into the used market.

Still Not Cheap

But 'down from the peak' is not the same as 'back to normal.' Average used car transaction prices remain roughly 20-25% above 2019 levels. A $20,000 car in 2019 equivalent still costs $24,000-$25,000. And financing costs have worsened dramatically — the average used car loan rate has climbed from 5% to 11%, adding $100-200/month to payments for the same vehicle.

The best values in today's used market are 2-3 year old EVs (which have depreciated faster than expected due to tax credit changes) and sedans (which remain less popular than SUVs). Trucks and popular SUV models still carry premium pricing.

Price Comparisons

Avg Used Car Transaction

Then: $20,200 (2019)

Now: $25,500

Down from $28,000 peak but still elevated

3yr-old Toyota Camry

Then: $18,000 (2019)

Now: $22,500

Down from $27k peak

Used Car Loan Rate (avg)

Then: 5.3%

Now: 11.2%

Financing costs amplify price pain

2yr-old Tesla Model 3

Then: $42,000 (2022)

Now: $28,000

EVs depreciating faster than expected