What You Can Do to Find a Good Used Car Now
High prices, older cars, and high interest rates make used-car buying difficult—and expensive
Shopping for a used car right now can be daunting, with a shortage of newer, low-mileage inventory; high interest rates; and high prices all standing between buyers and their next car. Several factors have pushed the average new-car price sky-high: the discontinuation of budget-friendly subcompact models; automakers shifting more production to lucrative, higher-optioned models; and tariffs raising production and import costs. That’s pushing more new-car shoppers to consider a used car to save cash, adding competition for desirable late-model vehicles.
Buyers who finance a used car have another hurdle: high interest rates, which increase the total amount paid over the life of the loan. The average used-car interest rate has climbed in the past several years and remains high, going from just over 9 percent in 2019 to over 11 percent in the first quarter of 2026, according to data analytics and consumer credit reporting company Experian. That isn’t likely to change soon, with the Federal Reserve announcing in July that it would maintain its current rate. (The Fed’s rate is what banks charge to lend to other banks, and an elevated interbank lending rate typically translates into higher rates on consumer loans, such as auto or home loans.)
Not everyone can hold out for years waiting for better rates and lower prices, though. If you need to buy a used car now, our main advice is to act quickly when you find what you’re looking for, and negotiate from an informed perspective. As always, that can make the difference between getting a fair deal and paying too much. Our guidance below can help you buy the right car that offers the best value and figure out the best time to buy.
Regardless of where overall prices are headed, Consumer Reports members can tailor a search on our Used Car Marketplace to find vehicles for sale in their area that best meet their needs. The listings include CR reliability and owner satisfaction ratings, and many listings include a free Carfax report. Members can also access ratings and information on used vehicles going as far back as 20 years.
Keep in mind that with elevated interest rates, it’s never been more important to make sure your credit score is in good shape. The most competitive loan rates are reserved for those with strong credit ratings.
Smart Strategies for Buying a Used Car: Financing, Savings, and Alternatives
Prearrange financing. Figure out your budget and get financing based on what you can afford to pay monthly and as a down payment. It’s always a good idea to secure financing through your bank or credit union before going to a dealership to look at cars. That way, you have a baseline to compare with dealer financing offers, which may or may not be as good a deal.
Setting up financing for a private-party sale is a little more difficult. You’ll need to have the funds secured and ready to pay out so that you can buy a car quickly if you find one that’s reliable and fuel-efficient, and meets your other needs.
Don’t borrow too much. Put as much money into a down payment as you can afford. This is good advice in any economic climate. Maximizing your down payment will reduce the amount you have to pay in interest on the rest and minimize the chance that you’ll be left hanging with more debt than equity as your aging car’s value sinks over the years.
For example, if you have to borrow $15,000 for a used SUV that will be worth less than $10,000 in a year or two, you may end up “underwater,” or owing more than the car is worth, especially with the average interest rate on a used-car loan at over 11 percent. If you crash the car or if it’s stolen, you’ll still have to make payments, even though you no longer have the car.
Cast a wide net. Prices outside your area may be better, or the model may be in better condition. You can find a good variety of used models on websites like TrueCar, a Consumer Reports partner, and through Consumer Reports’ Used Car Marketplace. Expand your geographic search if needed. Be cautious about searching too far from home, though. You want to be able to go see any car you’re considering buying and test-drive it before signing a sales or leasing contract. This is especially true for used cars. You don’t want the car to get scooped up while you’re traveling to see it.
Do your research. Consult Consumer Reports’ road tests and ratings, and look closely at reliability, owner satisfaction, and safety. Make a short list of contenders to test-drive, and have a good understanding of the various trim versions and available features. Print out information on the models you’re interested in from CR.org and manufacturer websites to take along with you.
Buy something reliable. If you can’t find a newer used car within your price range (including financing), you may find yourself looking at older models that you wouldn’t otherwise have considered. Consumer Reports recommends taking any used car to a reputable mechanic for an inspection before buying it. (If the owner or dealer balks at this request, you may be better off looking elsewhere.) You can also consult Consumer Reports’ predicted reliability scores to make sure you buy something that’s not likely to give you problems later.
The Best Used SUVs, Sedans, Small Cars, and Minivans
These top models—all tested by Consumer Reports’ experts—should suit all budgets.
Look at older models. You won’t be alone in driving an older car. The average vehicle on U.S. roads is now 12.8 years old, according to the automotive industry analysis firm Mobility Global. The same depreciation that shaves thousands of dollars off the price of new cars continues throughout a car’s life, making opting for an older vehicle an easy way to save cash.
If you decide to buy an older car, we recommend giving even heavier consideration to the vehicle’s reliability. Vehicles more than 5 or 6 years old aren’t likely to be covered by a factory warranty anymore (although many EVs have 10-year battery and powertrain warranties). You can purchase an extended warranty or service plan, but it’s usually better to set money aside for possible future repairs instead. The downside is that if you have to finance the purchase, interest rates tend to be higher on loans for older cars, but at least you will have less to finance.
Shop used EVs. Buyers looking for all the modern bells and whistles at a truly cut-rate price should consider an EV. Electric vehicles face the steepest depreciation of any type of vehicle, losing an average of 57.2 percent of their initial value over five years, according to an iSeeCars study. EV production outpaced demand in recent years, so even used models that are still covered under factory warranties are often priced to sell. Keep in mind that lower-than-expected prices can often signal reliability concerns or other issues, according to our car-buying experts. Always look at reliability and other key data before committing to a purchase.
Tax credits and other incentives can make EVs an even better deal. Even though the federal EV tax credit was discontinued in 2025, some states, utility companies, and municipalities still offer incentives for purchasing a used EV. It’s always worth checking with your local authorities or power company to see whether there’s more money to save.
Consider buying a new car. A new car may be more budget-friendly than you think, especially if you’re looking at a late-model used car. The difference in average transaction prices between a new vehicle and a 3-year-old used one has narrowed to around $16,000. If you’re looking at a 1- or 2-year-old used car, that difference can be even smaller. Available manufacturer and dealership incentives can help knock that difference down even further. Holidays like Labor Day that fall toward the end of the year often come with some of the sharpest deals because dealers want to move slower-selling inventory off the lots to make room for next year’s models. Plus, with new cars, there’s also the added benefit of a fresh factory warranty.
If you have to borrow money to buy a car, remember that the older the car, the higher the interest rate the lender charges. Per Experian, the average interest rate on a new-car loan is 6.39 percent, nearly half of the 11.43 percent average rate for used-car loans. New-car buyers with good credit may also be eligible for the manufacturer-subsidized financing offered with some brand-new models. Some manufacturers even offer 0 percent financing deals, especially on less popular models.
Which models come with incentives and promotions can change from week to week, so look at manufacturer and dealership websites to find out whether there are any current ones on the models that interest you, and check the pricing tab on Consumer Reports’ car-model pages to see what local buyers have paid for the model.
Be willing to compromise. If you have to buy an older car, some of the features you want—whether advanced safety and driver assistance or connectivity—might not be available. Decide which are absolute must-haves, and be flexible on the rest. Prioritize safety, comfort, efficiency, and reliability, because satisfaction with those may mean you’ll be happy to keep the car longer. As always, you’re more likely to find deals among less sought-after models like small sedans and front-wheel-drive SUVs, while larger SUVs and pickups tend to sell more quickly despite being more expensive.
