by Herb Weisbaum, The ConsumerMan

Last updated April 2, 2025

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Buying a late-model used vehicle will become even more challenging as prices rise due to declining supply and higher demand. In early March, the average price for a used car hovered around $25,000, according to Cox Automotive.

Industry experts told Consumers’ Checkbook that a sharp decline in lease volume during the pandemic is largely to blame for higher prices. Fewer leases in recent years have led to the “lowest level of three-year-old lease returns since 2013,” according to Edmunds.

If tariffs imposed by the Trump administration push new car prices higher, as expected, more Americans may turn to the used car market for relief. Even before the tariffs, the average new vehicle price had climbed to nearly $48,000. Higher prices could encourage some owners to hold on to their cars longer, leading to fewer trade-ins and an even tighter supply of used vehicles.

“So, we have a few different dynamics that really could shake up the used market and make buying a vehicle a lot more difficult,” said Ivan Drury, director of insights at Edmunds.

For budget-conscious buyers, a three-year-old car or truck coming off a lease remains an attractive option. These vehicles have already undergone significant depreciation, are often still covered by manufacturers’ warranties, and should provide years of reliable service. However, with supply shrinking and demand growing, finding one of these “gently used” vehicles at an affordable price could become increasingly difficult.

And let’s not forget the high cost of borrowing money right now: The average interest rate for used car loans in the fourth quarter of last year was 11.62 percent, according to Bankrate.

Should You Consider a Used EV?

Pre-owned electric vehicles are “cheap and plentiful right now,” according to Mike Quincy at Consumer Reports Autos. And there’s a greater selection of brands—you’re no longer limited to Tesla.

The price of used EVs has “fallen like a rock,” Quincy told Checkbook. He said that, on average, used EVs are “actually cheaper than used internal combustion engine cars,” he said. That’s because EVs have relatively high depreciation, and tax credits can reduce the selling price.

Reliability can be an issue. CR’s owner survey finds that older EVs have below-average reliability. Many of the reported problems deal with navigation software and other dashboard displays.

The smart move is to buy a used EV that’s still under warranty, especially the battery—which is at least eight years or 100,000 miles, depending on the manufacturer. A full battery replacement can cost between $5,000 and $16,000, according to Recurrent, a website that helps people find, drive, and sell electric cars.

Here's how CR recommends checking the battery health: Fully charge the battery and compare the estimated range readout on the dashboard to the original EPA estimate. While all battery packs degrade over time, CR’s survey results show that battery replacements are much less frequent for late-model EVs.

Don’t Rely Just on a Test Drive

Used cars and trucks can have hidden mechanical problems that you’d never notice during a test drive. A vehicle could have been in an accident and not properly repaired or totaled after a flood. A good body shop can hide the blemishes on a lemon.

Get a vehicle history report from a service such as Car Fax, Auto Check, BeenVerified, Kelley Blue Book, or the National Motor Vehicle Title Information System, but remember, these reports don’t always tell the full story. For example, if a vehicle was damaged in an accident that was not reported to the insurance company, it wouldn’t show up.

Speaking on Checkbook’s Consumerpedia podcast, Drury said he once bought a vehicle that he knew had been salvaged, but the car had been shipped to another state where the title had been washed, so the vehicle report came back clean. A rebuilt salvaged vehicle can have serious safety and mechanical issues.

That’s why it’s critically important to have any used car or truck inspected by a qualified, independent mechanic before you sign the contract. Don’t let the dealer tell you they have a mechanic. And if they say you can’t take the car to a mechanic for a pre-sale inspection—run away!

It might cost a few hundred dollars, but a good mechanic can spot flood damage, crash damage, or mechanical problems you could easily miss.

Years ago, I was helping a family member buy a used car. We found one that looked great and had low mileage. Thankfully, I insisted we have it inspected. My mechanic looked under the hood, and in less than 30 seconds, said, “You don’t want this car. Someone’s been playing with the manifold.” The dealer was embarrassed. We avoided costly repairs.

Remember: Once you sign the paperwork, that car is yours. Drive off the lot, and you’ll pay to fix any mechanical problems, unless the car comes with a warranty. Most used cars are sold “as is.”

Some dealers advertise “certified” used cars, which doesn’t always mean much. If the vehicle is certified by the manufacturer, that gives you some recourse if there are mechanical hiccups down the road. If it’s certified by the dealer and something breaks, you can’t turn to the automaker for help.

My advice, based on years of helping people with used-car complaints: Even if the car is factory certified, have it checked by a mechanic. If the vehicle is unsafe or has hidden problems, do you really want to be without your car while it’s in the shop for an extended period? A little money upfront can prevent serious aggravation and inconvenience.

Additional Resources

Do your homework before you go car shopping. Here are links to some articles from Consumer Reports that should help:

Related content from Checkbook:

 

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Contributing editor Herb Weisbaum (“The ConsumerMan”) is an Emmy award-winning broadcaster and one of America's top consumer experts. He has been protecting consumers for more than 40 years, having covered the consumer beat for CBS News, The Today Show, and NBCNews.com. You can also find him on Facebook, Twitter, and at ConsumerMan.com.