10 Most Expensive Places to Buy a Used Car in the U.S.

Editors' pick: Originally published Sept. 8

If you don't live where the people and their cars are, you're not going to get a good deal.

The used-car economy is driven almost exclusively by supply and demand. When General Motors and Chrysler went bankrupt and stopped leasing vehicles at the beginning of the recession -- and rental and municipal fleets held onto their cars longer -- used vehicle prices soared. They still haven't quite come down to earth, which means that means car buyers in certain regions have to shop around -- even if it means going a state over to find a deal.

"While staying local makes sense for most car shoppers, they also may not be aware that car prices do vary across the country," said Lisa Rosenberg, data analyst at CarGurus. "Expanding a car search to a nearby city can sometimes yield significant savings, and for those truly driven by price, it might be worth it."

New car sales are up just 0.6% this year after years of double-digit percentage point increases after the recession. Meanwhile, according to IHS Automotive, the average age of cars on U.S. roads is 11.5 years. That's up from 8.9 years a decade ago and 9.8 as recently as 2007. When car sales slumped during the 2008 and 2009 recession years as U.S. drivers held onto their cars longer, they learned that more durable vehicles meant that they didn't have to buy new cars nearly as often.

Not that they could afford one even if they were looking around.

The cost of the average new car in the U.S. is $34,143, according to Kelley Blue Book. However, if you're going to put 20% down on a car, pay it off over four years and make sure the principal, interest and insurance don't exceed 10% of a household's gross income, that isn't helpful when the Census Bureau puts the median household income is $53,657. Bankrate.com found that even in the middle of Silicon Valley in San Jose, Calif., that price exceeds the $32,856 maximum affordable purchase price and maximum $662 monthly payment, based on the Census Bureau's 2014 median-income data.

All of the above is creating a huge demand for used cars while decimating supply. According to Manheim Consulting's Used Vehicle Value Index, used car prices are up 2.3% during the first six months of the year. Total used vehicle sales are up 5% during that same as low gas prices that AAA puts at an average of $2.22 per gallon, or 20 cents lower than last year and almost half the near-$4 price of four years ago, drive sales across the board. Luxury cars (up 1.6%), SUVs and crossover (2.3%), vans (4.6%) and pickup trucks (6.7%) are all flying off of used car dealer lots.

Even in that market, there are some places where a used car is a great deal. CarGurus, for instance, used its Instant Market Value algorithm to determine the value of more than 5 million used cars in 139 different metro and rural areas. It then ranked the largest metro areas in the contiguous United States according to how prices in that market compare to the nationwide average.

The company found that car buyer paying the national average for a car in Harrisburg, Pa., would be best served driving an hour and a half or so to Allentown and paying 3% less than that average or making the two-hour trip to Scranton for a 3% discount. If you have paying 1% above the national average in Indianapolis? A less than two-hour trip to Dayton, Ohio, will get you get you a slightly better deal at 1% less than average.

Using the CarGurus numbers as a guide, however, we offer ten places to avoid paying a steep premium on a secondhand vehicle:

10. Jackson, Miss.
10. Jackson, Miss.

Percentage above the national average: 7%

Jackson isn't alone. Used cars in neighboring Alabama, Tennessee, Arkansas and Louisiana are all priced well above the national average thanks to overwhelming demand. To get a deal, you'd have to drive six and a half hours to Houston, where used cars sell for 2% less than the national average.

9. Wichita, Kan.
9. Wichita, Kan.

Percentage above the national average: 7%

You're being bled in Kansas, which is part of a huge plains-state dead zone for used cars. Bad deals about in Colorado, Nebraska and Missouri, but things get much better once you take I-35 South. Oklahoma City sells used cars for 2% below the national average, while nearby Tulsa is at least on average.

8. Seattle
8. Seattle

Percentage above the national average: 8%

Yes, Seattle and the I-5 corridor are packed, but the meager population density of Washington and the rest of the Pacific Northwest keeps the numbers low and the used cars spread out. If you're shopping for a used car in Seattle or the surrounding Seattle-Tacoma-Kent-Everett area, you're shopping where everyone else is -- and your neighbors all do fairly well for themselves. But there's really no better deal. Unless you have a cousin in Utah, where folks in Salt Lake City and Provo can get cars for 2% less than the national average, you're just going to have to eat that steep premium.

7. Little Rock, Ark.
7. Little Rock, Ark.

Percentage above the national average: 8%

Got five hours to kill? Because if you want that 2% discount in Oklahoma City or 3% deviation from the national average in Dallas, that's how long it's going to take you to get to the dealership or a private seller.

6. El Paso, Texas
6. El Paso, Texas

Percentage above the national average: 8%

The Panhandle may as well be Mars where used cars are concerned. While East Texas gets its cars for the national average or better, remote West Texas shares New Mexico and much of Arizona's plight. You can either drive nearly seven hours to Phoenix or seven and a half to San Antonio just to pay the national average. Other than that, you're just going to have to rely on luck.

5. Bakersfield, Calif.
5. Bakersfield, Calif.

Percentage above the national average: 8%

The Inland Empire gets absolutely robbed on new car prices. Nowhere in California makes out particularly well in this regard, but Bakersfield gets a far worse deal than Los Angeles just two hours down I-5. Los Angeles pays just 2% above the national average, which would be a fire sale in Bakersfield.

4. Portland, Ore.
4. Portland, Ore.

Percentage above the national average: 9%

Take Seattle's issue and magnify it by placing nine of the ten largest cities in the state along the I-5 corridor (sorry, Bend). Beyond that, there are a lot of wide-open spaces and distance between car owners and dealerships. There's also a lot of competition for what few used cars the state has, as two of its biggest cities are college towns, much of the state is rural and the largest city is known as a place where young people retire (though the myriad actual retirees and their Audis would disagree).

3. Reno, Nev.
3. Reno, Nev.

Percentage above the national average: 10%

Again, a matter of isolation. Close to Nevada's western border with California and seven hours from Las Vegas, Reno is surrounded by high desert and not much else. Carson City and Lake Tahoe aren't much help, so you're going to have to drive to Sacramento just to pay 5% more than the national average for a used vehicle.

2. Albuquerque, N.M.
2. Albuquerque, N.M.

Percentage above the national average: 10%

We can only wonder how much Walter White paid for his Pontiac Aztek in Breaking Bad Albuquerque. It really doesn't get much better anywhere else. The national average price for a used car is still six and a half hours away in Phoenix. You could drive five hours up I-25 to Colorado Springs, but you'll pay 3% above average instead of 10%. Good luck finding that better bad deal.

Fresno, Calif.
Fresno, Calif.

Percentage above the national average: 12%

See Bakersfield above. You really just don't want to buy a used car in inland California. Everybody around you wants them just as badly, you're likely not going to drive to San Francisco or L.A. just to still pay above the national average and there isn't a "cheap" used car until you get to Utah. We'd tell you to move, but you'd still have to buy one of the most expensive used cars in the country just to leave town.

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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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