CoPilot’s Return to Normal Index
June 2022 Report
INTRODUCTION
CoPilot’s Return to Normal Index is the only index that tracks the used car market’s return to normal. The Index shows the differential between what an individual used car would have been worth today if not for the extraordinary dynamics of the past two years, versus how much it is actually worth now – and tracks this differential over time. In doing so, the Index provides the only real-time barometer of which vehicle types offer the best value, how close a particular vehicle is to its projected normal price, and how far it has to fall.
Using CoPilot’s free Price Pulse tool, car shoppers can easily check current prices and the Price Premium on any car, track price changes, and compare across years and models to choose the right car and know when to buy.
BACKGROUND
The combined effects of extraordinary market dynamics over the past two years have created unprecedented inflation in used cars, leading to all-time high prices, up 51% percent from before the COVID-19 pandemic.
Significantly, the Return to Normal Index reflects current retail prices, rather than wholesale prices, offering a real-time metric of the challenges facing consumers in the market.
EXECUTIVE SUMMARY: May 2022 Data
As of May 31 2022, CoPilot’s Return to Normal Index found:
- At $31,450, average used car prices have reached a new all-time high.
- Overall, used car prices are now $9,375, or 42.5%, above their projected normal levels; there is a long way for prices to fall before we reach ”normal.”
- While the May 2022 Used Car Price Premium level is higher than for any month in the past, CoPilot’s data also reveals significant downward price pressure building in the market for used vehicles.
PRICE PREMIUM BY TYPE OF VEHICLE
Used SUV prices are $42,169 on average, just $95 less than their record high in February, and flat month over month.
- These prices are $10,814, or 35%, above their normal level.
Used truck prices are $39,817 on average, a record high, and $10,719, or 37%, above their normal level.
As the summer travel season kicks off, minivans are the segment whose prices are among the furthest from normal, in percentage terms.
- On average, used minivans cost $25,243, an all-time high. These prices are $8,414, or 50%, above their projected normal levels.
PRICE PREMIUM BY BRAND
Luxury Brands:
- The Used Car Price Premium for luxury brands reached record highs in May.
In this sector, used Teslas have the highest Price Premium, at $19,960 or 44% above projected normal levels, as dealer prices hit an all-time high of $65,089 for these hard-to-find vehicles in May 2022.
- Since gas prices started to increase in early March, this Price Premium for used Teslas has jumped from $17,740, or 38.6% above projected normal levels – a signal of very strong demand for more eco-friendly vehicles.
The average Price Premium for luxury brands is $11,321, or 39% higher than would normally be forecast.
Domestic Brands:
- The Used Car Price Premium for the leading domestic brands reached record highs in May. In this sector, used Rams have the highest Price Premium, at $11,866 above their projected normal levels.
- The average Price Premium for high-volume domestic brands is $9,065, or 42% above normal.
Foreign Brands:
- The Used Car Price Premium for high-volume foreign brands reached record highs in May.
- In this sector, used Volkswagens have the highest Price Premium, at $8,643 above their projected normal levels.
- The average Price Premium for high-volume foreign brands is $7,766.
PRICE PREMIUM BY VEHICLE AGE
More Recent Vehicle Models Will Lead Used Car Market Correction
Newer used car models are those that consumers turn to as a substitute for new cars. CoPilot analysis shows evidence that cracks are appearing in the market for these cars, suggesting they may soon adjust - and the effect could be dramatic.
- Consistent with a massive shortage in supply and run-up in demand for new cars, the Price Premium for 1-3 year old cars reached a record high of $11,765 in May 2022, or 42% above their projected normal levels.
- Similarly, the Price Premium for 4-7 year old cars reached an all-time high of $9,564, or 47.6% above projected normal.
- When combined with increasing payment levels due to higher interest rates, this growing pressure on dealer pricing is expected to lead to accelerating price declines over the coming months.
Prices for Older Car Models Will Remain High Longer
- On average, older cars from 2005-2014 are priced at $18,388.
- These prices are $6,027, or 48.8%, above their projected normal levels, the highest percentage Price Premium of any age category, and a Premium that continues to grow month-over month.
CONCLUSION
CoPilot has created an industry-first index that tracks current used car prices and compares them to their projected levels of where they should be in a normal, non-COVID economy. This Return to Normal Index has found that overall used car prices reached a new all-time high in May 2022, at $31,450, and that prices are now $9,375, or 42.5%, above their projected normal levels, with Price Premiums substantially higher in certain segments of the market. While the index found that consumers are paying record premiums for most segments, brands, and vehicle ages, the Index does indicate that 1-3 year old and 4-7 year old cars may be at or close to peak, and will be the first sectors of the used car market to start to return to normal price levels. Moving forward, the Index will offer real-time information to consumers on the best time to buy a car.
Consumers can look up the real-time value and the Price Premium for any individual car they are looking to buy, or calculate the current trade-in value for their own car at www.copilotsearch.com/pricepulse.
METHODOLOGY
The Index is drawn from data collected by leading car shopping app CoPilot. CoPilot’s data and proprietary methodology track the online inventory of virtually every dealer in the country, every day, offering real-time analysis around car prices, inventory, and sales. This June report covers data through May 31, 2022. Data in this first report are preliminary, and will adjust in future, due to changes in methodology and as additional data sources are integrated.
CoPilot provides free pricing tools for consumers. Price Pulse makes it easy for car shoppers to check the current market value and Price Premium for any car, track price changes, and compare years and models to choose the right car and know when to buy. For car owners and sellers, Price Pulse calculates the real-time value of their car, using the same data only dealers used to have, allowing consumers to track how much their vehicle has appreciated, so they can decide whether and when to sell, or negotiate the best deal at trade-in or lease-end. For media publishers, CoPilot offers embeddable data tools, allowing journalists and bloggers to integrate interactive charts within their web content, apps, or newsletters, powered by CoPilot’s unique data and analytics.
Media Contact:
Kerry Close
kclose@groupgordon.com
732-609-2644
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