CoPilot’s Return to Normal Index

June 2023 Report

EXECUTIVE SUMMARY: MAY 2023 DATA

CoPilot’s Return to Normal Index measures the differential between what any used car price would have been today if not for the extraordinary dynamics of the past two years, versus how much it is actually worth now, at retail. As it tracks this differential over time, the Return to Normal Index provides the only real-time barometer of the used car market’s recovery, as well as how close individual vehicle segments, brands, and age brackets are to returning to normal pricing levels.

As of June 1, 2023, CoPilot’s Return to Normal Index found that used car prices increased for the fourth consecutive month in May, but at a slower rate than in April.

• Used cars were listed at an average price of $32,113 in May, up $194 (or 0.6%) since April.

  • Since February, used car prices have increased by $1,693 (or nearly 6%) – a response to strong consumer demand and confidence, and more affluent consumers in particular who continue to benefit from pent-up savings.

• On average, used cars have a Price Premium of $8,191 (or 34%) above projected normal levels, and the highest Premium since November 2022.

  • This amounts to a $67 (or 0.8%) increase in Premium from April, when the Premium was $8,124 (or 34%) above normal. This Premium has increased by about $800 since January, an indication that prices are becoming more and more unaffordable compared to where we would expect them in a normal, non-COVID economy, reversing the trend of late 2022.

• Expensive segments like used SUVs continue to show the most dramatic price increases. In May 2023, they were listed at an average price of $43,652, marking the fourth consecutive month of price increases.

  • Their Price Premium – now $9,076 (or 26%) above normal levels – has increased by a substantial 53% since February.

• Prices of 1-3 year old (nearly-new cars), also a major driver of price increases in the used market this year, have started to cool slightly (down by $225 month-over-month) and may be peaking. However, sales volumes remain strong, up 9% in the past month, which is driving inventory down and will keep prices close to record highs.

• On the less expensive end of the market, consumer demand is cooling as interest rate hikes (and banks’ tightening credit standards – and even exiting auto financing), limit consumer financing options, and availability of lower-priced vehicles dwindles. As a result, sales of older used vehicles have fallen in recent months.

• As electric vehicles continue to see remarkable price volatility this year, in large part due to unprecedented pricing fluctuations in the new Tesla market, used Teslas have become the first brand to dip below normal projected price levels. In May, their average price was $47,578, down 10% (or $5,445) since the start of the year.

  • Since their peak in July 2022, when gas prices also reached record highs, the Premium on used Teslas has fallen by a massive 107%, making them a bargain compared to all historical prices and comparable non-EV models.

• Luxury brands had the highest Premium of all make types, averaging $9,655 (or 31%) above projected normal levels, and despite their Premium falling for the first time in three months.

  • For the first time ever, used Genesis vehicles had the highest absolute Price Premium among luxury brands, at $8,583 (or 24%) above projected normal levels, suggesting a surge in popularity of this brand.

PRICE PREMIUM BY VEHICLE AGE

• In May, nearly-new (1-3 year old cars) were listed at an average price of $41,057 – a decline of $225 from April and the first month-over-month decline for this age bracket since February.

  • However, so far in 2023, nearly-new car prices have increased by a net total of $783 (or 2%).
  • The Premium for this age bracket was $10,678 (or 35%) above projected normal levels – an decrease of $372 (or 3%) since the previous month.
  • As prices cool slightly, sales among nearly-new cars remain particularly strong, up 9% in past month.

• In May, preowned (4-7 year old cars) had an average listing price of $28,853, amounting to a slight decrease of $46 (or 0.5%) from the previous month, and a decrease of $518 (or 2%) since January.

  • The Price Premium for pre-owned cars was $7,582 (or 36%) above projected normal levels. This represents a $69 increase in Premium since April, when this age bracket was priced $7,513 (or 35%) above projected normal levels.
  • Despite the decline in pre-owned vehicle prices, their sales have fallen by 12% since peaking in March. 

• In May, older (8-13 year old) used cars had an average listing price of $17,518,  an increase of just $28 from the previous month.

  • The Price Premium for 8-13 year old cars in May was $4,734 (or 37%) above projected normal levels. This represents a slight increase of $33 from April, when the Premium for these vehicles was $4,731 (or 37%).
  • Similar to pre-owned cars, sales of older used cars have slowed (down 6% since their March peak), despite the fact that prices are down by more than $500 this year.

PRICE PREMIUM BY TYPE OF VEHICLE

• SUVs: In May 2023, used SUVs were listed at an average price of $43,652, representing a month-over-month increase of 0.6% (or $280).

  • May marks the fourth straight month of price increases for used SUVs, which are up by 9% (or $3,502) in the past 12 weeks alone.
  • At $9,076, the Price Premium for used SUVs is now 26% above projected normal levels. This represents a 53% increase in Price Premium from February, when used SUVs were priced $6,034 (or 18%) above projected normal levels.

  • Within the SUV segment, the largest, most expensive models have increased the most in price.

  • For instance, full-size luxury SUVs have jumped in price by 9% (or about $5,281) in the past 12 weeks, while full-size SUVs are up 11% (or about $4,496) in that same time period.

  • Despite these increases, used SUVs still remain the segment closest to returning to normal levels, and its Premium is still down $594 year-over-year.

• Minivans: In May 2023, minivans increased in price for the second month in a row, now listed at an average price of $25,045. This represents a price increase of $541 (or 2%) since April.

  • The Price Premium for used minivans was $7,460 (or 42%) above projected normal levels. This represents a 9% (or $634) increase in Premium since April, when the Premium for used minivans was $6,826 (or 39%) above normal levels.
  • This marks the fourth consecutive monthly increase in Premium for used minivans since February.

• Pickup Trucks: In May 2023, the average listing price for used pickup trucks was $41,529, up 0.7% (or $283) since April. This marks the third consecutive month in which used pickup truck prices increased.

  • In May 2023, the Price Premium for used pickup trucks was $9,722, or 31%, above projected normal levels – a 1% (or $104) increase since April.
  • Despite this increase, used pickup trucks remain the segment second-closest to returning to normal levels, on a percentage basis.

PRICE PREMIUM BY FUEL TYPE

• In May 2023, used electric vehicles had an average listing price of $45,265 – a decline of 2% (or $962) from the previous month. Used electric vehicles have steadily declined in price since July 2022, when gas prices that skyrocketed in the spring of 2022 first started to fall.

• Used Teslas prices are now listed at an average of $47,578, down by another $1,123 since April, and by a total of $3,944 (or 8%) since Tesla first announced price cuts to new models in December.

  • Used Teslas are the first brand to finally reach normal, pre-COVID pricing levels – currently priced at $1,598 (or 3%) below projected normal. In the past month alone, the Price Premium for used Teslas has fallen by $3,649, bringing the Premium to negative levels for the first time ever.
  • Since the Premium for used Teslas peaked in July 2022 (along with gas prices) at $24,534 (or 53%) above projected normal levels, it has since declined by a staggering 107% in the past nine months.

• In May 2023, used hybrid vehicles were listed at an average price of $43,461, an increase of 0.7% (or $293) since April. Following months of steady price declines since gas prices peaked in summer 2022, this represents the fourth consecutive month in which used hybrid prices have increased.

PRICE PREMIUM BY BRAND

Domestic Brands:

• In May 2023, high-volume domestic brands had an average Price Premium of $8,677 (or 36%), above projected normal levels.

  • The Premium for domestic brands jumped from April, up by 1% (or $116).

• In May, used Dodge had the highest Price Premium among domestic brands, listed at $4,867, or 21%, above projected normal levels. They were closely followed by used Ford, which had a Price Premium of $4,862 or 17%, above projected normal levels.

Foreign Brands:

• In May 2023, the Price Premium for high-volume foreign brands averaged $6,724 (or 37%), above projected normal levels.

  • This represents a 0.7% (or $48) decrease in Premium since April.
  • In May, among foreign brands, used Toyotas commanded the highest Price Premium, listed at $5,043, or 20%, above projected normal levels. They were followed by used Volkswagens, which had a Price Premium of $4,388, or 23%, above projected normal levels, and used Kias, whose May Premium was $4,354, or 24%, above normal.

Luxury Brands:

• In May 2023, the Price Premium for luxury used car brands fell slightly, by 0.2% (or $15), marking the first monthly decrease for luxury brands following three consecutive months of increases.

  • Emerging as a preferred luxury brand, used Genesis vehicles for the first time ever had the highest absolute Price Premium in this category, listed at $8,583, or 23%, above projected normal levels.
  • They were followed by used Cadillac and Mercedes-Benz, which had Price Premiums of $8,707 (or 29%) and $7,584 (or 20%), respectively.

METHODOLOGY

The Return to Normal 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 of car prices, inventory, and sales. This May 2023 report covers data through April 30, 2023. Data and methodology have been refined in this report, for increased sensitivity to market fluctuations. Data may adjust in future, due to changes in methodology and as additional data sources are integrated.

CoPilot provides free pricing tools for consumers and the media. 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’s Price Pulse market trends offers free, embeddable data tools, allowing journalists and bloggers to integrate interactive charts and tables within their web content, apps, or newsletters, powered by CoPilot’s unique data and analytics. Follow CoPilot’s Price Pulse Twitter account here for up-to-date market insights.

View the press release on this month’s Index report findings here.

Media Contact:

Kerry Close

kclose@groupgordon.com

732-609-2644