Buying a Car: Higher new-vehicle prices fuel used sales

Rising new-vehicle prices are helping fuel the used-vehicle market, especially among younger buyers, said Jonathan Banks, vice president of vehicle valuations and analytics for J.D. Power.

Speaking Thursday at the J.D. Power Automotive Summit here, Banks said Generation Z buyers are increasingly unable to afford new vehicles, and would rather look for bigger used vehicles with more content than cheaper, smaller new vehicles. Generation Z buyers are those born after about 1996.

J.D. Power says sales of vehicles less than $20,000 fell 19 percent last year, while sales of vehicles more than $40,000 rose 7.4 percent. The average new-vehicle transaction price in 2018 was $32,500, up from $31,700 in 2017.