Drivers in Alaska and Wyoming Are Stuck Paying 20% More for Used Cars

Serena Aburahma
· 5 min read
In the auto industry, we're used to prices changing region to region. It's true that a vehicle may cost more to own in North Dakota than in Oregon, or that a particular model is in higher demand in Florida as opposed to Colorado.
Used cars
see an especially high price fluctuation because local circumstances that lead to used cars being sold and bought again also come into play. In some bizarre cases, it can even
cost more to buy used
instead of new vehicles.
did a study on which states pay the most to buy used cars and found an interesting, unexpected fact. Of all the states, Alaska and Wyoming pay the most for used cars.
Alaska and Wyoming have used car prices that are 20% greater than the national average, and 31% more than the state where used cars are most affordable (Indiana). Why do used cars cost so much more in Alaska and Wyoming?
While both states are very different, they share a few key traits that contribute to the high cost of buying a used car.
More snow, more problems.

Why are used cars so expensive in Alaska and Wyoming?

Alaska has the single most expensive used cars on the market, and many of us can guess why. It's Wyoming that's the puzzler. As you may know, most things are more expensive in Alaska. It's a simple matter of supply and demand.
Supply is low and transport is a serious effort, so acquiring new things (even used things) requires a higher cost. But cars can be shipped to Wyoming more easily, so why the similar rate?
The key lies in what Alaska and Wyoming have in common: Mountains, snowy weather, and an overwhelming need for SUVs. States where trucks and SUVs are the most popular vehicles drive up the average cost per used car.
In other words, they are buying larger and more expensive vehicles so regularly that it impacts the statewide used car cost average. Though the one thing Wyoming has that Alaska doesn't is the state’s 4% sales tax, which is pretty low compared to other states and levels things out a bit.
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What affects the cost of a preowned car in your state?

What influences used car prices will relate to supply and demand, the value of the average used car in your state and any additional costs like sales tax.
If there are fewer used cars, naturally the price goes up. This plays a major role in why used vehicles are more costly in Alaska where everything is scarce and having a vehicle can be a matter of life-or-death.
When looking at states where SUVs and trucks have a higher percentage of the total car population, the average used car price naturally rises. States that sell mainly passenger cars (sedans, hatchbacks, etc) tend to see a lower average used car cost.
This is partly why the iSeeCars study reports that mountain states like Wyoming (followed by Montana, Arkansas, and Idaho) are leading the pack behind Alaska.
All of our top five most costly used car averages are mountain states where trucks and SUVs aren't just a stylistic choice, they're a necessity.
Lastly, state sales tax can play a role. Adding 4-7% sales tax to the cost of a vehicle has a way of increasing the final cost, so states with higher sales tax will see some rise in the cost of used cars among all other purchased items.

Reducing the cost of car ownership

If you live in a state with a high price on average for used cars, finding your next vehicle in a fair price range can be a challenge. Fortunately, there are other ways to reduce the expected cost of your next car purchase and the costs of ownership.
Choosing a common color and model can result in a lower demand-raised sticker price.
Cars that are easy to source cost less, as a matter of supply and demand. Picking a white Toyota Camry will probably be more available and less costly than holding out for the midnight blue 2020 Mercedes Benz.
Another way to lower your cost is by looking for cars from previous years instead of looking for the latest or last-latest model. Cars that are slightly older (but still have low mileage) have just a touch fewer features for a few thousand dollars off the sticker price.
Choosing models released a little earlier can save you a bundle if you don't absolutely need the biggest screen and latest software.
Getting a good deal on car insurance can also effectively lower the total cost of the car by lowering your mandatory monthly payments after purchase.
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