Generally, a used car purchase is always going to be cheaper than buying new and, in many cases, provide significantly better value to the buyer because of it. However, in the current market, that is shockingly not always the case.
For certain models, the price difference between a new vehicle and a nearly new one has shrunk so dramatically that buying new may be the more logical financial choice. The November Carfax Used Car Index highlights this unusual trend, revealing a market shaped by tight inventory, high interest rates, and abnormally high value retention.
The Shrinking Price Gap
A key takeaway from the November report is the surprisingly small price gap for specific, high-demand models. The pandemic-era reduction in new car sales has led to fewer used cars entering the market three years later, keeping used inventory below historic levels and propping up prices. For vehicles that hold their value exceptionally well, this has created a scenario where buying new is surprisingly compelling.
One such example the Used Car Index provided was the Honda Civic. The average price for a 2023 model on Carfax is around $24,300, while a new 2025 model averages $27,400. While there’s a price difference, the gap narrows considerably when financing is factored in. Interest rates for used car loans are often higher compared to new car loans, with customers looking at 7-9 percent vs. 5-6 percent. Some new cars can even be bought with promotional zero percent offers. These slight differences in financing can make the monthly payments nearly identical. A buyer might pay only $25 more per month for a brand-new Civic, gain a full factory warranty, the latest features, and three fewer years of wear and tear.
Carfax is also seeing this trend with models like the Ford Bronco, Toyota Corolla Cross, and Toyota Tacoma. However, this is not a universal rule. For other models, the value proposition of buying used remains strong. A 2023 Hyundai Ioniq 5, for example, averages $25,500, while the 2025 model is priced around $48,800, making the used version a clear bargain.
Mixed Trends Across Segments and Regions
That trend of uneven value is prevalent throughout the used market. Luxury SUVs saw a large average price drop in October, falling by about $270 while luxury cars experienced the biggest increase, with average prices jumping by nearly $400. Pickup trucks also saw a considerable price hike of over $225. Other segments, including non-luxury cars, SUVs, and hybrids/EVs, saw more modest price fluctuations either rising or falling by fewer than $100.
Vehicle type is not the only thing that affects pricing either, region and demand also come into play. The Plains states saw a massive $800 increase in the average price of luxury cars, while the Midwest and West also saw significant jumps in the segment. Meanwhile in the Southeast, they only rose about $300. In the South and Southwest, pickup trucks led the price increases. Hybrids and EVs saw some of the most significant price drops, particularly in the Plains, Midwest, and Northeast.
Navigating the Current Market
For consumers, the current market requires careful research and flexibility. While used car prices remain generally high, the narrowing gap on certain models presents an opportunity for those considering a new vehicle purchase. The advantages of a new car—lower financing rates, a full warranty, and the latest technology—can easily outweigh a small price premium.
For sellers, the high value of used vehicles, particularly popular SUVs and trucks, means it’s a good time to assess trade-in values. Tools that provide a history-based valuation can help owners understand what their vehicle is truly worth.
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