This is why used cars aren’t a bargain anymore


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In ordinary times, consumers shopping for a car may head straight to a used vehicle lot to save money. The coronavirus pandemic has impacted nearly every field for better or worse, and the auto industry hasn’t been spared. Increased demand for cars and a disrupted supply mean shoppers can no longer expect to find a bargain on a used vehicle.

As a result, shoppers may need to take on larger auto loans or look or settle for older models. Researchers examined auto loan inquiries on the LendingTree platform and found that the average amount of financing sought on a two-year-old vehicle rose by 28.3%, or $5,176, between the second quarters of 2020 and 2021. Further, the average age of a used vehicle for which consumers sought financing jumped 21.1% to seven years old in the same period.

Researchers culled anonymized data from 600,000 LendingTree auto loan inquiries to find where shoppers are buying older cars — and how much they’re seeking to borrow for them.

Key findings

  • Consumers are seeking to take out larger auto loans than last year. The average amount of financing sought on a two-year-old vehicle rose by 28.3%, or $5,176, between the second quarters of 2020 and 2021.
  • Madison, Wis., saw the biggest jump in financing amounts for two-year-old vehicles between 2020 and 2021 (regardless of make or model). Average financing inquiries here rose by 45.5%, or $7,575. Madison was followed by Rochester, N.Y. — 35.6% increase, or $7,112 — and Chattanooga, Tenn. — 32.4% increase, or $6,383.
  • The average age of used vehicles for which consumers sought financing on LendingTree jumped 21.1% between 2020 and 2021. Consumers hoped to buy used models that were 5.8 years old in 2020, but that rose to seven years old in 2021. The average age for vehicles rose in more than half of the 98 largest U.S. metros examined.
  • Residents in New Orleans inquire about buying the oldest used cars, at an average of 16.2 years old. New Orleans also saw the largest increase — 153.1%, or 9.8 years — in average used vehicle age between 2020 and 2021. Car buyers in Miami aimed for younger models at an average of 4.7 years old — youngest of the metros analyzed.

Bigger price tags mean more financing sought

As used car prices have increased, consumers are seeking higher auto loan amounts. From the second quarter of 2020 to the second quarter of 2021, the average amount on loan inquiries on two-year-old vehicles increased by 28.3%, or $5,176.In four of the largest U.S. metros, the amount of financing sought on auto loans rose at a rate higher than the national average between 2020 and 2021. Car shoppers in Madison, Wis., may be wishing they purchased cars earlier, as average loan amounts requested rose by $7,575.

Metros where financing requests for two-year old vehicles increased the most
Rank Metro Q2 2020 financing requested for 2018 vehicle Q2 2021 financing requested for 2019 vehicle Difference ($) Difference (%)
1 Madison, WI $16,644 $24,219 $7,575 45.5%
2 Rochester, NY $19,979 $27,091 $7,112 35.6%
3 Chattanooga, TN $19,692 $26,075 $6,383 32.4%
4 Omaha, NE $17,499 $22,744 $5,245 30.0%
National average $18,298 $23,474 $5,176 28.3%

The amounts that shoppers requested went up significantly across make, model and car type, but those looking for certain models may have found themselves in need of bigger loans than expected. One of the most popular vehicle models on the LendingTree platform saw financing amount requests jump by 81.8% in the past year.

Changes in financing requests for two-year old vehicles
Type Make Model Q2 2020 financing requested for 2018 vehicle Q2 2021 financing requested for 2019 vehicle Change ($) Change (%)
Sedan Toyota Camry $12,783 $23,235 $10,451 81.8%
Compact SUV Jeep Wrangler $14,523 $24,014 $9,491 65.4%
Full-size SUV Chevrolet Tahoe $20,334 $25,030 $4,696 23.1%
Sports car Dodge Challenger $20,998 $25,722 $4,723 22.5%
Pickup truck Ford F-150 $20,901 $24,900 $4,000 19.1%
All vehicles $18,298 $23,474 $5,176 28.3%


Turning back time to find affordable cars

The rise in financing inquiry amounts, plus the shrinking supply, may suggest consumers are seeking older models due to availability and affordability. Between the second quarters of 2020 and 2021, the average age of used vehicles for which LendingTree users sought financing rose 21.1% from 5.8 years old to 7.

The majority of the 98 largest U.S. metros saw average used car ages rise, with ages increasing in 53 metros, remaining the same in four and falling in 41.

The average age of used cars shoppers looked to buy rose as much as 153.1% in the metro with the biggest age hike. Car buyers in New Orleans in 2021 sought vehicles nearly 10 years older on average than they did in 2020, helping the Big Easy rank as the metro that buys the oldest cars at 16.2 years.

Two other metros — Knoxville, Tenn., and Cleveland — also saw average used car ages more than double:

Places with the biggest jump in age of used vehicle purchases
Rank Metro Q2 2020 average age (years) Q2 2021 average Age (years) Change (years) Change (%)
1 New Orleans, LA 6.4 16.2 9.8 153.1%
2 Knoxville, TN 6.4 15.5 9.1 142.2%
3 Cleveland, OH 6.5 13.8 7.3 112.3%
National average 5.8 7.0 1.2 21.1%

The metros that buy the oldest used cars closely mirror those that saw the biggest increase in age over the past year.

Milwaukee just overtakes Detroit, buying used cars just slightly older than the Motor City, while Seattle trumps Las Vegas. Denver joins the top 10 with consumers seeking cars slightly older than in Wichita, Kan. — despite Wichita seeing a bigger jump in ages.

Places that buy the oldest used cars
Rank Metro Average vehicle age (years)
1 New Orleans, LA 16.2
2 Knoxville, TN 15.5
3 Cleveland, OH 13.8
4 Milwaukee, WI 12.1
5 Detroit, MI 12.0
6 Raleigh, NC 10.3
7 Seattle, WA 9.6
8 Las Vegas, NV 9.5
9 Baltimore, MD 9.2
10 Denver, CO 8.8

Floridians evidently may prefer newer cars, with two of the three metros with consumers buying the youngest used vehicles hailing from the Sunshine State, including Miami, where consumers buy the youngest used cars overall at an average of 4.7 years.

Orlando and Houston follow with residents seeking to purchase cars that are an average of 5.1 years old in each metro.

When it comes to the most popular models on the LendingTree platform, the average age of used Chevrolet Tahoes made the biggest jump — 4.1 years — from 2020 to 2021 compared to other similarly popular types of cars consumers sought to purchase. On the contrary, car buyers shopping for Toyota Camrys sought similarly aged vehicles this year compared to last year.

Consumers sought to finance older used vehicles
Type Make Model Q2 2020 average age (years) Q2 2021 average age (years) Change (years) Change (%)
Full-size SUV Chevrolet Tahoe 6.1 10.2 4.1 67.6%
Compact SUV Jeep Wrangler 9.2 11.5 2.3 24.6%
Sports car Dodge Challenger 3.8 4.6 0.8 21.8%
Pickup truck Ford F-150 5.6 6.1 0.4 7.6%
Sedan Toyota Camry 4.7 4.8 0.0 0.9%
All vehicles 5.8 7.0 1.2 21.1%

Shopping for a car? Get your expectations in gear

While the coronavirus pandemic has created a fairly unique situation for the autos market, LendingTree autos expert Jenn Jones says consumers can expect some of the impacts to last for years to come.

“Greater demand for used cars will continue beyond the pandemic,” she says. “Almost every auto manufacturer made production cuts over the last year, and the microchip shortage kinked the supply chain this summer. The lack of new cars drives prices up across the market.”

For consumers who can’t wait to get a better picture, Jones has some tips to save if you head to a dealer.

  • Shop online. Not only can the online car-buying experience keep shoppers safer than shopping in person as the pandemic continues, but it’s an easier way to compare prices rather than visiting multiple dealerships.
  • Take a holistic view when it comes to the price. Jones says sellers often try to keep the buyer focused on the monthly car payment, but beware. Make sure you’re not overpaying for your new vehicle or being undersold on your trade-in. Check with industry guides Kelley Blue Book, Edmunds and NADAguides before you shop.
  • Don’t accept the first offer. When it comes to financing your car, Jones warns against accepting a dealer’s APR offer. “Dealers can often inflate consumer APRs by two percentage points,” she says. She suggests seeking a loan offer, especially a preapproval from a lender like your bank and then asking the dealer to beat this rate. Be sure to compare auto loan rates at LendingTree to find your best offer available.


Analysts reviewed more than 600,000 anonymized online loan inquiries for auto loans on the LendingTree platform for vehicles that were at least a year old during April to June 2020 and April to June 2021 to determine the average vehicle age during those periods, both nationally and for the 98 largest metropolitan areas in the U.S.

Additionally, researchers calculated the average loan amounts requested for all two-year-old vehicles and five of the most popular models on the LendingTree platform during those periods.

All figures represent preliminary consumer financing interest and don’t purport to be final transaction costs.

This article originally appeared on and was syndicated by


More from MediaFeed
Is it smart to get an 84-month auto loan?


If high monthly payments keep you from buying the car you want, you may be tempted to lower your payments by signing up for a 72-, 84- or even a 96-month term loan.

While financing with an 84-month auto loan can lead to a lower monthly payment, you should be aware of the risks. Depending on your financial situation, it could be a way to get the vehicle you want, but you could pay more than you planned.

Many auto lenders, including banks, credit unions and online lenders, offer 84-month financing. Be sure you know what’s at stake before you sign up for a loan term that long.

6 reasons an 84-month auto loan is a bad idea

Many financial experts say an 84-month auto loan is a bad idea. You will pay more for the car than you would with a shorter loan even though the monthly payments will be less than the shorter loan term. According to Edmunds, nearly 70% of new car loans in the first half of 2020 were longer than 60 months, with the average loan term hitting 70.6 months.

That’s due in large part to the rising cost of vehicles. According to Kelley Blue Book, the average transaction price of a new car has risen to $38,378, and popular vehicles, such as crossover SUVs and pickup trucks can be even more.


Prostock-Studio / istockphoto


Typically, interest rates for an 84-month loan are higher than average car loan interest rates for 60- or 72-month loans. After all, 84 months is 7 years, which is a long time to drive a car.


The loan term is longer, so you will pay more in interest for an 84-month loan compared to a shorter term. Overall, the car will cost more to own by the time the loan is paid off.


diego_cervo / istockphoto


Longer-term loans usually require a good credit score, according to Melinda Zabritski, senior director of automotive financial solutions with Experian. Lenders take on more risk with a longer loan, so they want to lend to people who have a track record of paying their bills.


Most new-car warranties run 36 months, with some running up to 60 months, or even longer for some components such as the drivetrain. If you keep a car for the full 84 months, you’ll own it after the warranty runs out, which means you’re on the hook for all repair costs.


Damir Khabirov / istockphoto


As you drive your vehicle and the miles add up, it’s more likely it will need repairs and maintenance, such as fluid changes, timing belts and other things that require the skills of a mechanic. The higher the mileage ticks, the more likely it is that important components (like the transmission and engine) will start to require replacement and significant repair.

“The longer the loan term, the more interest you will pay over the life of the loan and the less money you may be able to set aside in the long run for maintenance and repairs as the vehicle ages,” Joe Pendergast, vice president of consumer lending at Navy Federal Credit Union, said.


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Otherwise known as being upside down, negative equity happens when you owe more than your car is worth. Unless you pony up a substantial down payment, you’ll likely be upside down with an 84-month loan term. That’s because the car’s value will depreciate faster than you’re paying down the principal of the loan. With a long-term loan, you pay less principal each month, so it takes longer to pay off the balance.

Many people like to get into a new car sooner than 84 months, so they’re stuck with a car or truck that’s not worth as much as they owe on it when it comes time to trade it in.


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Depending on your situation, an 84-month loan term might make sense. Perhaps you really need a new vehicle to accommodate a changing family situation, or maybe you’ve relocated to a snowy climate where you need a four-wheel-drive SUV. In some cases, an 84-month loan may be your best option.




A long loan term may be the only way you can purchase a new vehicle that fits your needs. If you’re trying to make room for a growing family or need to buy a truck for work, there may not be many other options. With a long-term loan, you can make the monthly payments fit your budget. Keep in mind you’ll actually be paying more for the vehicle over time.




Depending on your financial situation, you may have debt with higher interest rates or a more substantial loan balance. You could put the money you’re saving on the car payment toward other loans.

“A longer term on your car loan may provide more financial flexibility in your budget by giving you a lower monthly payment,” Pendergast said.


Deposit Photos


During the COVID-19 shutdowns, some car manufacturers offered 84-month loans at 0% financing. While these terms may seem like a good deal, be aware that it may not be the best deal. If a manufacturer also offers a cashback incentive on the car, it may make more sense to take the incentive, apply it to the down payment and take a loan with a higher interest rate, Zabritski said. That way, you’re financing less principal, which can keep the payment down but may also cost less in interest.

Adding tax, title and registration to the loan amount will increase the amount of interest you pay. If you make a down payment or have a trade-in, the amount you borrow will go down.


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If you must get an 84-month auto loan, there are some steps you can take to make the most of it.


Usually, interest rates are slightly higher for 84-month terms compared with 60- and 72-month terms. Compare rates and use an auto loan calculator to crunch the numbers. A shorter-term rate with a lower interest rate will mean a higher monthly payment but lower overall cost. Shop around for interest rates and get multiple offers from lenders to compare.




You could make additional payments to pay the loan off early or build up equity. If you’re buying a vehicle at the average price of $38,378, an 84-month loan would be $602.19 per month, and you’d pay $12,206 in interest. If you pay an extra $100 per month, you could save $2,298 in interest and own the car in just over five years instead of seven years.


solvod / istockphoto


You drive off the lot with the car you want now with an 84-month loan. If your financial situation improves, you could refinance for a shorter term to save on interest.


You could pay 20% or more of the purchase price upfront. That reduces the amount you borrow. However, you should also avoid financing fees such as taxes, registration and dealer fees and add-ons such as the dealer’s paint protection coating or vehicle service plan.

When you put more down on your vehicle, you’re less likely to become upside down, and you may be able to avoid guaranteed auto protection or GAP insurance. GAP insurance covers the difference between the loan balance and the car’s value in the event the car is a total loss.


You can reduce the amount you borrow by buying a used car that costs less than a new one. According to Experian, the average payment for a used vehicle is $391 compared with $554 for a new one. You can save some money and have a more affordable payment if you choose to buy a used vehicle. There are however, some trade-offs to buying used, too. There are some 0% and other low-rate financing deals available for used cars at shorter terms, such as 36 months that could reduce your payment if you qualify.


Most people go shopping for a car and find one they like before they think about financing. That’s backwards. You’re more likely to fall for dealership sales tactics and buy a more expensive car than you can afford when you shop this way.

Instead, get preapproved for a loan with a bank, credit union or online lender. The dealer may have lenders that can help you get preapproved before you select your car.

With a preapproval, you’ll know how much you can borrow to pay for the car and what the monthly payment would be. You’ll have a loan amount and interest rate that you can use to compare with the financing options from the dealer and other lenders. You’ll be prepared to make an informed decision when you find the car you want.

Lenders look for a high credit score for an 84-month loan term, so check to see what your credit might be before applying. That way you’ll know which lenders might give you preapproval.





With just a little preparation, you can get preapproved by a bank, credit union or online lender. You can research rates online to get an idea of what’s being offered in the market. Lenders will use your creditworthiness to determine the interest rate they will offer you. Keep in mind that the credit score for an auto loan is a little different from other loans.





Get your information together before you visit a lender or apply online. You’ll need documentation like:

  • Personal information, including name, address, phone number and Social Security number.
  • Employment Information, such as your employer’s name and address, your job title and salary and length of employment.
  • Financial information, including your current debts, your living situation, what kind of credit you have available and your credit score.
  • Loan information, including the amount you expect to finance and the length of the loan term you want, as well as any trade-in or down payment information.


Armed with your documents, apply for your auto loan online and in-person with a few different lenders. Shop around for the best auto loan rates. If you’re shopping for a car, multiple credit inquiries made within 14 to 45 days won’t hurt your credit score any more than a single inquiry would.




If you’re successful in getting preapproved, you’ll receive a loan quote that shows how much you qualify for, the interest rate and the length of the loan. You can use this information when you go shopping at the dealer. You’ll know how much you can afford to spend on the car, and you’ll be able to compare financing offers.




If you have less than good credit, a cosigner could help you qualify for a loan that you may not be able to get on your own. Using a cosigner with a good credit score could help you qualify for a lower interest rate as well.

Keep in mind the cosigner is responsible for paying the loan if you don’t pay it. That could negatively affect their credit score as well as yours. If the cosigner is a friend or family member, make sure they’re aware of their commitment to the loan.


JackF / istockphoto


Be aware of a few financing traps dealers may use while you’re shopping for a car. If you can recognize what the dealer is doing, you can avoid paying more than you planned.


Research the manufacturer’s suggested retail price (MSRP) of the vehicle you’re looking at, and any incentives that may be available. The sticker price can vary by trim levels and options, so research the options you want. Many cars sell below sticker or MSRP except for a few high-demand models. Be wary of dealer add-ons that are often presented at the final stage of negotiation, such as:

  • Nitrogen in the tires
  • Upholstery and paint protection packages
  • Vehicle service contracts
  • Window tinting
  • Window vehicle identification number (VIN) etching packages




Research your car’s value on sites like Kelley Blue Book and Edmunds to see the market price for a trade-in in your area. If you still owe money on the car, and especially if you owe more than the car is worth, you could have less negotiating power.



SerhiiBobyk / istockphoto


Don’t lose sight of how much the car will cost you through the life of the loan. That’s where the 84-month loan term may look attractive but could cost you several thousand dollars on a new car. Look at the total cost of the purchase price plus the total amount of interest before you settle on a loan term.


This where the loan preapproval will help keep you on track. Have a good sense of how much you can borrow and how much you can afford to pay each month considering your other obligations.


Leasing can be a good alternative to a longer loan term. You could drive the same car for a lower monthly payment, although leases are typically 36 to 37 months. Before you lease, understand the pros and cons compared with buying a car. An increasing number of people are turning to leasing for their new vehicles, according to Experian.

One of the reasons is that the average new lease payment is $466, while the average monthly payment for a new loan is $569, Zabritski said.


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What is the interest rate on a car loan?

Depending on your credit score and other factors, interest rates on car loans vary from low manufacturer incentives of 0% up to the maximum allowed interest rate in your state. The average rate for new-car buyers is 5.61% while used car buyers pay an average 9.65%, according to Experian.

How long can you finance a new car?

You can usually finance a new car for 24 months up to 96 months or eight years. The average loan term is 70.6 months.

How long can you finance a used car?

Used cars can usually be financed up to 72 months, although it can depend on the age and mileage of the car.

This article originally appeared on MagnifyMoney.comand was syndicated by


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