App version: 0.1.0

It’s a Seller’s Market in a Used Cars' World

Lantern Shareable Asset 6 Header Image 1
Brandon Lee
Brandon LeeUpdated August 22, 2022
Share this article:
Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
Earlier this year, shortages in the new-car market caused the demand for used cars to go through the roof, bringing prices — and profits — with it. It was a good time to be a used-car seller.But what if you were on the other side of the table? What if you’re the one who needs a car?To learn more about what it’s been like to search for and buy a used car, we surveyed 1,006 Americans who bought a pre-owned vehicle in the last 12 months (which means anytime between June 2021 and June 2022). Below are the most interesting findings from the survey.Note: We rounded to the nearest whole percent, meaning that some data sets don’t add up to 100%.

The Median Amount People Paid for a Used Car Was $9,000

According to our data, the median amount people actually paid for a used car was $9,000, which ended up being $1,000 more than the median amount people wanted to spend on the vehicle.Our study found that women tended to stay more on budget than men when shopping for a used car:
  • Women:
    • Median budget: $8,000
    • Median paid: $8,100
  • Men: 
    • Median budget: $9,000
    • Median paid: $10,000
The data tell us men tended to go 10 times more over budget than women ($1,000 over budget vs. $100 over budget)Finally, when looking at the country’s 10 most populous states, the median used car prices were: 
  • $11,500 in Florida
  • $10,750 in California
  • $10,000 in New York
  • $10,000 in Ohio
  • $10,000 in Texas
  • $10,000 in Georgia
  • $9,000 in Illinois
  • $7,500 in Pennsylvania
  • $7,150 in Michigan
  • $4,750 in North Carolina
Florida took the cake for most expensive, with the median pre-owned vehicle price coming in at $11,500. At the other end of the scale, North Carolina had the most affordable used vehicles with a median price of $4,750 — less than half the median price of most of the other states we analyzed.

BMW Was the Most Commonly Purchased Used-Car Make

Overall, BMWs were the most commonly purchased cars by our respondents. More than one in ten used car buyers (14%) said they purchased a BMW in the last 12 months. According to our survey, the top five most commonly purchased used car makes were:
  • BMW: 14%
  • Audi: 10%
  • Chevrolet: 10%
  • Honda:  9%
  • Ford: 9%
Taking a closer look at the results, it seems that men tend to prefer sportier, performance-based vehicles, like BMWs and Audis. On the other hand, women may tend toward more practical cars like Hondas and Chevrolets.The top five most popular car makes for men were:
  • BMW – 17%
  • Audi – 13%
  • Ford– 9%
  • Chevrolet– 8% 
  • Toyota – 7%
And the top five most popular car makes for women were:
  • Honda – 13%
  • Chevrolet – 11%
  • BMW – 11%
  • Ford – 9%
  • Toyota – 7%
When comparing age groups, the top three most popular car makes were:
  • Boomers
    • Chevrolet – 16%
    • Ford – 13%
    • Hyundai, Acura, Kia, Chrysler – 6%
  • Gen X
    • BMW – 12%
    • Ford – 10%
    • Chevrolet – 9%
  • Millennials
    • BMW – 17%
    • Audi – 11%
    • Honda – 9%
  • Gen Z
    • Chevrolet – 13%
    • Honda – 11%
    • Ford – 11%
When looking at the country’s 10 most populous states, the most commonly purchased car make was BMW for all EXCEPT:
  • Pennsylvania (Ford was the most common)
  • Illinois (Chevrolet was the most common) 
  • Georgia (Honda was the most common)
  • North Carolina (Audi, Nissan, Chevrolet, and Ford tied for the most common)

One-Fourth of Respondents Did Not Get the Make and Model of Car They Originally Wanted

One in four used-car buyers did not get the make or model they originally wanted because of inventory issues: 
  • 18% of respondents had to settle for a different make and model altogether.
  • 4% had to downgrade from their preferred make and model.
  • 3% had to upgrade from their preferred make and model
This result coincides with data that shows the United States has one of the lowest car inventory levels since the financial crisis of the late 2000s. 

Over Half of Respondents Say They’re Loyal to a Certain Car Brand

A majority of respondents (52%) say they are loyal to a certain car brand. We asked that group which brand they’re loyal to, and BMW was by far the most common answer (27%). Perhaps this isn’t too surprising considering BMW was the most commonly purchased used car make.The next runners-up for car brands with the most loyal followings were Audi (14%) and Chevrolet (7%).When we break the results down by gender, we find that men tend to stick with a certain make, and women do not:
  • A majority (56%) of men say they are loyal to a certain car brand.
  • A majority (52%) of women say they are not loyal to a certain car brand.

The Majority of Used Car Buyers Plan to Resell the Vehicle

Used cars really are temporary purchases in the United States. Most of our respondents (59%) said they would sell the car they just bought.Of those who plan to resell their car, we found that the most common:
  • Car make was BMW (19%).
  • Payment method was cash (32%).
  • Purchase location was a used car dealership (38%).

Good Gas Mileage Was the Most Important Factor in Respondents’ Search for a Used Car

With soaring gas prices and more people traveling, the results here were not a shock. Good gas mileage was the most important factor in respondents’ search for a used car. Price was also an important factor, followed by vanity qualities, such as the car’s appearance and birthday. Respondents’ highest priorities when searching for a used car were:
  • Good gas mileage: 26%
  • Low mileage: 18%
  • Lowest price possible: 15%
  • Looks good: 14%
  • Newer car: 11%
  • Fully electric: 9%
  • Fast car: 7%

Most Respondents Did Not Say They Got a Great Deal on the Car

A majority of respondents (56%) did not feel like they got a great deal on their used car. The keyword here is “great.” Here’s how the results broke down when we asked respondents how they felt about what they paid for the car:
  • 27% said they were just relieved to have a vehicle (regardless of price).
  • 18% felt neutral.
  • 10% felt like they were ripped off.
  • 44% said they got a great deal.
Of those who said they did not get a great deal:
  • The median budget was $8,000 and median actual amount paid was $9,500. So they tended to have paid $1,500 more than they wanted to.
  • The most common buying source were used car dealerships (42%).
  • It was most common for them to spend one to three months searching before buying the car (45%).
Of those who said they did get a great deal: 
  • The median budget and actual amount paid were the same: $8,000.
  • Used car dealerships (36%) and private sellers (35%) were the most common buying sources. 
  • 38% said it took them less than a month to find the car.

Buyers Preferred the Term “Pre-owned” to “Used”

Thinking about selling your used car? If so, make sure to use the right terminology. People tend to prefer the term “pre-owned” over other used car descriptors. This preference was reflected across all age groups and genders. Finally, something we can all agree on. We asked respondents which common used car term sounds best to them:
  • “Pre-owned car”: 36%
  • “Used car”: 29%
  • “New-to-you car”: 22%
  • “Second-hand car”: 13%

Over One-Third of Used-Car Buyers Felt “Exhausted” During the Process of Getting a Car

We asked people how they felt during the process of searching for and buying a used car (they could select multiple emotions). 36% said they felt exhausted by the process, despite the fact that it took most of this group (71%) three months or less to find and buy their vehicle. On top of that, 27% said they felt annoyed, and 19% said they felt disappointed. 

Most Respondents Did Not Purchase Their Car From a Dealership

The cheesy and often stereotyped used-car dealer may be a thing of the past. Only 40% of people said they purchased their car from a dealership. Nearly one-third of our respondents purchased from private sellers (32%), and more than one-fourth of respondents purchased their pre-owned vehicle from websites like Carvana and AutoTrader (28%).  

The Majority of People Used Cash or Personal Savings to Pay for Their Used Car

When it came to buying a used car, most people used either cash or money from their personal savings. The third-most popular option was taking out an auto loan. When we asked how they paid for their used car, the responses were as follows:
  • Cash – 36%
  • Personal savings – 21%
  • Auto loan – 18%
  • Credit card – 13%
  • Traded in for another car – 6%
  • Friends and family pitched in – 6%
If you were like 18% of our respondents who used a car loan to buy your used vehicle, refinancing may help. As long as your credit is better now compared to when you took out the original loan, auto loan refinancing can potentially lower your rate and help you save money in the long term. Talk to your current lender and potential refinance company about when and how you can refinance your used car purchase.

The Takeaway

The used-car market truly is a seller’s market, and buyers have had to shift gears to keep up with rising prices and inventory shortages. As we sought to learn more about the buying experience, we found out:
  • Men prefer to buy sportier cars like BMWs, while women prefer more practical cars like Hondas.  
  • Most of our respondents (56%) don’t believe they got a great deal on their used car. 
  • A majority of used car buyers (59%) intend to resell the vehicle.
  • Over one-third of respondents were “exhausted” by the process of buying a used car, even though most of them (71%) were only searching for three months or less. 
Another important result from our study is that nearly one-fifth of people took out an auto loan to finance their used-car purchase. If you’ve taken out a car loan to buy a used or new car, auto loan refinancing may help you save money by potentially lowering your rate. If your credit has improved since you originally took out the loan, consider comparing your options to see if you qualify for a better rate.
The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

About the Author

Brandon Lee

Brandon Lee

Brandon has written for hundreds of companies across the world for more than a decade. He specializes in topics such as technology, finance, crypto, and marketing.
Share this article: