My recent purchase of a Jeep for my teenage driver has taught me valuable insights about the used car market.

• If you haven't bought a used car in a while, be ready for a significant increase in prices.
• The increase in used vehicle prices has made it harder to negotiate, as pricing is now more transparent.
• My daughter's top wish list item was a Jeep, and Wranglers, in particular, have maintained their value.

As a teenager, I purchased my first car, a Tercel with minimal mileage, for under $10,000. This was three decades ago.

As my daughter turns 17, I imagined a similar situation. She has been working and saving since the age of 13, so I believed she could contribute to purchasing a reasonably priced pre-owned car.

The used car market has experienced a significant change, with prices skyrocketing.

Ivan Drury, Edmunds' director of insights, stated that anyone who has avoided the car market recently will be taken aback by the current state of the industry. "It is unlike anything you were used to."

According to Cox Automotive's latest report, the average listing price for used cars has increased by $25,361 since the pandemic disrupted supply chains and caused prices for new and used vehicles to skyrocket.

The report stated that affordability is still a challenge for consumers and supply is more limited at lower price points.

The average transaction price for new cars is $47,823 as of October, which is close to an all-time high. With fewer options available at lower prices, it's nearly impossible to find a car for less than $30,000.

Edmunds reports that the percentage of vehicles sold for more than $70,000 has increased from 3% to 10%, while the percentage of vehicles sold for less than $20,000 has decreased from 8% to 0.3%.

According to Drury, the substantial increase in car prices is due to the inclusion of high-tech features such as touch screens, 360-degree cameras, and heated seats in modern vehicles.

"The vehicle is filled with technology to the point of being overwhelming," he said. "It's amazing how powerful they are."

Hunting down a used Jeep

My daughter's top wish list item was a Jeep, and Wranglers, in particular, have maintained their value.

An analysis of over 2 million cars by iSeeCars revealed the used models that provide the lowest prices and longest remaining lifespan. The 10-year-old Wrangler Unlimited ranked 18th among SUVs in the study.

The average price for a 10-year-old Wrangler remains at $23,381, and the cost of ownership for older cars with higher mileage will increase, experts predict.

In 2018, Wrangler introduced advanced safety features, improved fuel efficiency, and enhanced technology, compared to older models.

Drury stated that a Jeep Wrangler is not the inexpensive car it was 10-15 years ago.

We had better luck searching used inventories at dealerships within a 50-mile radius from home. We found two 2021 models that fit our criteria and budget at a Jeep Chrysler Dodge dealership in Shrewsbury, New Jersey.

Drury stated that with the increased transparency of car prices, it is more challenging for buyers to negotiate. Although dealerships still provide incentives, they are less likely to lower the sticker price. According to Drury, the abundance of information makes it difficult for dealerships to charge a different price than their competitors.

In 2025, the IRS has announced higher capital gains tax brackets.

Securing a financing offer is the best way to save money on an auto loan, according to advice from an expert. The average interest rate on a four-year used car loan is currently 8.21%, but good credit scores can lead to significantly better loan terms.

We managed to reduce some fees added during the point of sale negotiation.

Despite our initial plan, we ended up spending more than expected, including the additional cost of insuring a teen driver.