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Used car prices have fallen from last summer’s high levels, especially for buyers in the market for a used electric vehicle.
List prices for used vehicles have declined by 3.6% in the past year, according to new research from iSeeCars.com, and new data suggests there's a strong likelihood that even lower prices are coming soon.
Prices for used electric vehicles, meanwhile, are down 29.5% since June 2022, the study found. The average list price for a used EV is now about $41,000, down from about $58,000 a year ago.
The decline in used EV prices began last fall and then accelerated in January when Tesla announced price cuts for new cars. Used Tesla Model 3 prices fell by about 20% just from September to January.
Data from car shopping app CoPilot shows an even higher year-over-year decline in used EV prices, with their analysis finding that prices are down 35% — amounting to a price difference of over $23,000.
Used Tesla prices have come down the most, both companies’ data shows, which isn’t surprising given that the EV maker announced major price cuts for its new vehicles earlier this year.
“With Tesla cutting prices on new models its used EV values have tumbled,” Karl Brauer, executive analyst at iSeeCars.com, said in a report. “Because Tesla makes up the bulk of the used EV market the dramatic drop in Tesla values has impacted the entire category.”
What experts say
High auto loan interest rates are putting downward pressure on prices for the used car market. According to Cox Automotive, used auto loan rates are above 13%, which is even higher than new loan rates of just under 9%.
- The average list price for used cars between one and five years old was $32,811 in June, a drop of $1,237 in the past year, according to iSeeCars.com.
- Used Tesla Model 3 prices declined the most, with the average list price falling by 30.5% the past year. The average price declined by more than $16,000 as it dropped to about $37,000 in June.
- Used car prices could be poised to fall further because wholesale prices just had one of the largest monthly declines (4.2%) in the history of the major index that tracks them. Wholesale prices reflect what dealers pay at auction, and retail prices usually trend in the same direction with a several week delay.
- As far as used EVs prices, they have fallen largely due to the decline in new EV prices.
- Gas prices are also down significantly from last summer’s record highs, which means fewer people are considering buying a used EV in order to save money on fuel costs, experts say.
- While used car prices are still elevated from pre-pandemic levels, Americans who’ve been waiting for prices to come down are finally seeing it happen. “Shoppers in need of a used car can find deals now, particularly on used Teslas,” Brauer said.
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