The effects of pandemic-era vehicle shortages are continuing to push up prices across the U.S. auto market, including for older used vehicles. Industry analysts say lower production volumes and tighter supply conditions are limiting availability in both new and used car markets.
According to Cox Automotive, roughly 8 million vehicles that would normally have been produced for U.S. buyers during the pandemic years were never built because of factory shutdowns and supply shortages. Automakers also shifted production toward higher-margin vehicles such as trucks and SUVs, contributing to higher prices.
Lower vehicle production reshapes the market
U.S. vehicle sales recovered from a pandemic-era low of 13.8 million units in 2022 to 16.2 million in 2025, according to the U.S. Bureau of Economic Analysis. However, volumes remain below the record 17.55 million vehicles sold in 2016.
JD Power Senior Vice President Tyson Jominy said the industry has sold roughly 16 million fewer vehicles than expected if annual sales had remained at 2016 levels. About half of that shortfall occurred after the pandemic.
I think it's kind of the new normal outside of a big economic impact. Supply is not getting a lot better over the next three to four years.
Jeremy Robb, Cox Automotive
Industry analysts said fewer new vehicles entering the market have also reduced supply in the used market, creating pricing pressure across vehicle age categories.
Leasing declines reduce used vehicle supply
Automakers and dealers reduced leasing activity and incentives during the pandemic as vehicle inventories tightened. Leasing accounted for roughly 30% of the new vehicle market before the pandemic but fell to 18% in 2022, according to Cox Automotive.
Because leased vehicles often return to the used market after several years, the decline in leasing has further limited used vehicle availability. Automakers also continued focusing on more profitable vehicle categories that are generally more expensive and leased less frequently.
Incentives on new vehicles have partially recovered but remain below prepandemic levels. Cox Automotive said incentives averaged about 9.5% of vehicle prices before the pandemic and currently range between 6.5% and 7%.
Consumers shift toward older vehicles
Rising vehicle prices, inflation, and higher household expenses are pushing more consumers toward older used cars. Analysts said demand for 9- and 10-year-old vehicles has risen significantly compared with historical trends.
Prices have gone up about a third and yet salaries and income have not nearly matched those increases.