The U.S. used car market is experiencing a renewed rise in prices as consumers increasingly turn to pre-owned vehicles in search of more affordable transportation options. According to new data from CARFAX, the average price of a used vehicle has now surpassed $25,500, highlighting the combined effects of tight supply and sustained demand.
Price growth has accelerated in recent weeks. Since mid-March, average used car prices have climbed by approximately $1,500, building on earlier gains seen at the start of the year. In February alone, prices rose by about $450, representing a 1.7% month-over-month increase. This pace exceeds the same period last year, when prices edged up by just 1.1% in March, suggesting stronger upward momentum in the current market cycle.
The recent increase follows a 12-month low recorded in January, marking a clear turnaround in used vehicle values. Since then, prices have steadily trended upward as inventory shortages persist and consumer demand remains resilient despite broader economic pressures.
Price movements vary across vehicle segments. SUVs and luxury SUVs continue to lead gains, posting a 2.3% increase toward the end of March. Electric vehicles are also contributing to the upward trend, with average prices rising by around $560 over the past month, supported in part by higher fuel costs in certain regions.
Several underlying factors are contributing to the overall price increase. Elevated new vehicle prices are pushing more buyers into the used market, intensifying competition for a limited supply of vehicles. At the same time, lingering supply chain disruptions linked to the pandemic era continue to constrain inventory levels, particularly for newer models.
The shortage of low-mileage, certified pre-owned vehicles is adding further pressure. These vehicles typically command premium prices, and their reduced availability is tightening supply even more, pushing overall market prices higher.
Despite the recent gains, analysts note that price increases remain less volatile than the sharp swings seen in earlier post-pandemic periods. While the $1,500 rise over the past month is significant, it may indicate the market is stabilizing at a higher price baseline rather than entering another phase of rapid escalation.
Regional variations also remain evident. CARFAX data shows that Florida currently offers some of the most competitive pricing relative to vehicle history-based valuations, with Texas and California also ranking among the more favorable markets for value-conscious buyers.
Depreciation trends further reflect shifting market dynamics. Newer vehicles are retaining their value more effectively, with current model-year cars depreciating by around 12.5%, compared to steeper declines of roughly 34% for older models. This points to stronger residual values across much of the used vehicle market.
Overall, a combination of strong demand, limited supply, and persistently high new car prices continues to support elevated used vehicle values, even as the pace of price growth begins to moderate.
