CoPilot’s Return to Normal Index

December 2022 Report


EXECUTIVE SUMMARY: NOVEMBER 2022 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 November 30, 2022, CoPilot’s Return to Normal Index found:

  • Used cars overall were listed at an average price of $31,770. The average used car had a Price Premium of $7,889, or 33%, above projected normal levels.

    • This represents a 7% decline from November’s overall Premium of $8,497, which was 36%, above then-projected normal levels. It also amounts to a staggering 19% correction since July, when the overall Price Premium reached a peak of $9,731, or 41%, above normal levels.
    • Overall, the average used car Price Premium has fallen by 9% in twelve months.


CoPilot Price Premium Index for Used Cars (Nov 2022)


  • The average used car price has fallen in 5 of the last 12 months, and was down year-over-year in November for the first month since the COVID pandemic, dipping 2% below November 2021 prices, with further deflation expected in the coming months.

  • All age brackets continued to decline steadily in price. Since the start of 2022, pre-owned (4-7 year old cars) saw the most substantial declines, down by 13%, followed by older used cars (8-13 year vehicles), which saw a 10% decline over the year.

    • Even 1-3 year old car prices, which for most of the year hovered near record highs, fell by 7% since January.
    • However, with more interest rate hikes projected, the used car market still has further to fall before these cost savings are passed on to the consumer in real terms.


Average Used Car Listing Price (Nov 2022)


  • In 2022, used minivans and SUVs saw the most substantial price declines, both down by 5% since January.

    • They were followed by used crossovers, which were down 4% since the start of the year and are now listed at an average price of $28,314.
    • Used SUVs and trucks remain the two segments closest to returning to pre-COVID, normal levels in percentage terms, priced 20% and 27%, respectively, above projected normal levels.


PRICE PREMIUM BY VEHICLE AGE

  • In November, nearly-new (1-3 year old) cars were listed at an average price of $38,987, down 1.8% from the previous month.

    • The November Price Premium for 1-3 year old cars was $9,675 (or 33%) above projected normal levels – a 4% drop from last month’s Premium of $10,109 (or 34%) above projected normal.
    • Since the start of 2022, 1-3 year old car prices have fallen by 7%. Their prices peaked in July at an average of $42,333, and since have declined by $3,346 or 8% from that record high.
    • Nearly-new cars have dropped in price for five straight months, and finally turned negative year-over-year for the first time since pre-pandemic, with average prices 1.7% below November 2021.


  • Listing prices of 4-7 year old pre-owned cars declined more substantially in November. Their average price was $27,137, a 2.1% drop since October.

    • The Price Premium for 4-7 year old cars in November was $6,909, or 34%, above projected normal levels – a 5% decline from the previous month.

    • In 2022, the Price Premium for pre-owned cars peaked in April, at $9,335, or 44% above projected normal levels. That Premium has since fallen by 26% to its current levels.

    • Throughout 2022, pre-owned cars have seen a massive $4,128 or 13% drop from their peak pricing levels in January, when they were listed at an average price of $31,265.

    • Pre-owned cars have dropped in price for 10 of the last 12 months, but only just turned negative year-over-year for the first time since pre-pandemic, with average prices 1.1% below November 2021.


  • Older used vehicle (8-13 years old) prices trended downward in November.  Their average listing price was $16,601, down 2.1% from the previous month.

    • The Price Premium for 8-13 year old cars in November was $4,428, or 36%, above projected normal levels – representing a 5% drop in Premium since October.

    • In 2022, the Premium for 8-13 year old cars peaked in April, at $6,449, or 51%, above normal levels. Since then, their Premium has dropped by 31%.

    • From the beginning of 2022, 8-13 year old car prices have fallen in price by 10%. They reached their highest average price of 2022 in April, when they were listed at $19,215, and have since fallen by $2,614, or 13%.

    • Pre-owned cars have dropped in price for either consecutive months, but have yet to turn negative year-over-year, with average prices still 0.8% above November 2021.


Average Used Car Listing Price (Nov 2022)


PRICE PREMIUM BY TYPE OF VEHICLE

  • In November, used SUVs were listed at an average price of $41,468, down 1.6% or $658 month-over-month.

    • Used SUV prices are down 7% from their peak pricing level of $44,824 in March. They are also down 5% since the start of 2022, when their average listing price was $43,482.

    • At $6,861, the Price Premium for used SUVs has dropped to 20% above normal expected prices.

    • By comparison, in October, the Price Premium for used SUVs was $7,494, or 22%, above projected normal levels.

    • The Price Premium for used SUVs peaked in March, at $11,046, or 33%, above normal levels – and has since fallen by 38%.

    • The Premium has also fallen by 29% over the past year, from $9,689, or 29% above projected normal levels, in January 2022.

    • With the smallest Price Premium by percentage of all vehicle segments, used SUVs remain the segment relatively closest to returning to normal pricing levels.


  • In November, the average listing price for used pickup trucks was $40,741, representing a modest decline of just $162 or 0.4% since October.

    • The average listing price for used trucks has fallen very slightly – by 0.5% – since the start of the year.

    • In November, the Price Premium for used pickup trucks was $8,725, or 27%, above projected normal levels – the second-smallest Price Premium of all vehicle segments.

    • This represents a 2% decline in Premium from the start of the year, when the Premium was $8,917, or 28%, above normal levels.

    • The Premium for used pickup trucks peaked in April, at $9,577, or 30%, above projected normals – and has since fallen by 9%.


  • In November, the average listing price for used minivans was $24,992, down just $286 since October.
  • * However, among all segments, minivans (along with used SUVs) have fallen the most in price since the start of the year. Their average listing price is also down 5% from $26,330 in January 2022.
    • * Since they reached peak pricing levels in March, at $27,257, minivans have fallen in price by 8%.
    • In November, the Price Premium for used minivans was $6,902, or 38%, above projected normal levels.
    • * The Premium for used minivans peaked in April, at $8,996, or 50%, above normal levels – and has since declined by 23%.
    • The Premium for used minivans has declined by 17% since the start of the year, when they were listed on average $8,294, or 46%, above projected normal levels.


Used Car Price Premium by Segment (Nov 2022)


PRICE PREMIUM BY FUEL TYPE

  • In November, used electric vehicles were listed at an average price of $54,314 - a massive 20% drop since their peak price levels in July, when gas prices first started to ease, and a 6% drop in the last month alone.

    • Since the start of January to their July peak, used EV prices skyrocketed by 30%, accelerating their rise in March as gas prices also started to surge.

  • Used Tesla prices fell once more in November to an average of $57,412, a 5% decline in just one month, and following another 5% decline from September to October.

    • Since the start of the year, used Tesla prices have fallen by 9%, from an average of $63,049 in January.

  • The Price Premium for used Teslas also dropped in November, to $10,273, or 22%, above projected normal levels.

    • November is the fifth consecutive month in which the Price Premium for used Teslas has declined.
    • The Price Premium has fallen by 42% since its peak in July, when it reached a massive $24,439, or 53%, above projected normal levels.

  • In November, used hybrid vehicles were listed at an average price of $43,574, down 3% since the previous month. Since gas prices started to ease in July, used hybrid prices have fallen by 12% from their peak of $49,809.

    • Similar to electric vehicles, hybrid prices surged in the first half of 2022, jumping by 20% between January and July.


PRICE PREMIUM BY BRAND

Domestic Brands:

  • In November, the Price Premium for high-volume domestic brands averaged $8,066, or 34%, above projected normal levels.

    • This represents a 13% decline in the Premium for domestic brands since the start of 2022. Domestic brands also fell in average listing price by 5% since January.
    • The average Price Premium for domestic brands peaked in August, at $9,840, or 42%, above normal levels – and has since fallen by 18%.


Used Car Price Premium for Domestic Brands (Nov 2022)


  • In November, used Fords had the highest Price Premium among domestic brands, listed at $7,638, or 31%, above projected normal levels.

  • The used car domestic brands that fell the most in price in 2022 were:

    1. Chevrolets, by 7.3% - to an average listing price of $30,870
    2. Dodges, by 7.3% - to an average listing price of $25,828
    3. Chryslers, by 7.0% - to an average listing price of $22,052


Foreign Brands:

  • In November, the Price Premium for high-volume foreign brands averaged $6,814, or 38%, above projected normal levels.

    • This represents a 13% decline in the Premium for foreign brands since the start of 2022. Luxury brands also fell in average listing price by 7% from their peak in September.
    • The average Price Premium for foreign brands peaked in September, at $8,473, or 48%, above normal levels – and has since fallen by 20%.

  • In November, used Kias had the highest Price Premium among foreign brands, listed at $6,916, or 43%, above projected normal levels.

  • The used car foreign brands that fell the most in price in 2022 were:

    1. Nissans, by 5.8% - to an average listing price of $22,982
    2. Toyotas, by 4.8% - to an average listing price of $29,034
    3. Subarus, by 3.7% - to an average listing price of $26,206


Used Car Price Premium for Foreign Brands (Nov 2022)


Luxury Brands:

  • In November, the Price Premium for luxury brands averaged $9,315, or 29%, above projected normal levels.

    • This represents a 13% decline in the Premium for luxury brands since the start of 2022. Luxury brands also fell in average listing price by 2% since January.
    • The average Price Premium for luxury brands peaked in April, at $11,954, or 38%, above normal levels – and has since fallen by 22%.

  • Used Porsches had the highest absolute Price Premium among luxury brands, listed at $17,250, or 26%, above projected normal levels.

  • The used car luxury brands that fell the most in price in 2022 were:

    1. Infinitis, by 9.8% - to an average listing price of $36,095
    2. Teslas, by 9.0% - to an average listing price of $63,049
    3. Jaguars, by 6.9% - to an average listing price of $36,553


Used Car Price Premium for Luxury Brands (Nov 2022)


ANALYSIS AND CONCLUSIONS

After extraordinary inflation in the used car market during 2021, 2022 saw price volatility caused by increasing supply versus demand tension. Ongoing supply chain constraints limited new car supply, which kept nearly-new car prices rising into the summer. Economic uncertainty, especially due to inflation, war in Ukraine and the associated surge in gasoline prices, and the Federal Reserve’s action to combat inflation through interest rate hikes, led to growth in car prices and Price Premiums slowing, and then turning negative for all types of vehicle. By the end of 2022, we have seen average Price Premiums for used cars drop from over 41% to 33%, with some segments dipping below 20%. Some types of car, which had the most dramatic run-up in price, have now seen the most dramatic falls - notably used Teslas, which were selling for over $70,000 and a Price Premium of 50% in the summer, when gas prices peaked, have dropped in price by 19% or almost $14,000, to a Price Premium of only 22% as gas prices have dropped back below their levels of this time last year.

Double-digit Price Premiums show the used car market still remains far above normal, with a long way potentially to fall. December is usually a slow month for car sales, and this year that could be especially true, so prices are likely to continue their decline. Looking ahead to 2023, CoPilot expects buyers to continue to take their time and negotiate harder for lower prices. February to April is likely to bring a surge in buying, by consumers with tax refunds in hand or expected. The government’s new tax credits will stimulate demand for electric and hybrid vehicles early in the year, likely causing regular gas and diesel car prices to sag in comparison – although not by as much as if gas prices had remained high.

Many manufacturers expect to increase new car shipments in 2023, which will take more pressure off nearly-new car prices, which will fall further from their peaks, following the course of older cars. With several more interest rate increases highly likely, the real cost of car payments to the average buyer will go up, unless nominal prices fall further and faster. And with economic uncertainty rising and consumer confidence sagging, as pandemic savings dwindle, the stock market drops, and layoffs and potential recession loom, cost-conscious buyers will do more research, shop around for lower-priced vehicles, and take longer to buy, further dragging down the average price of used cars.

As of this writing, there is particular uncertainty about the future of Carvana, with it’s stock down 50% in a week on concerns of potential bankruptcy. This could result in a significant drop in demand (as Carvana is a major buyer of used cars), and potentially a flood of supply (if they end up needing to liquidate inventory rapidly – which all parties will strive to avoid), which would be yet another wild card deflationary factor in 2023.

Overall, CoPilot believes good times are ahead for the American car buyer, especially the cash buyer who is not so affected by rising interest rates offsetting falling listing prices, or the buyer who can wait for the right car and use the time to arm themselves with information to negotiate the best price. For those who need to buy soon, the end of December is a relatively good time to negotiate a better deal from dealers eager to hit their sales targets. Consumers with a car to sell or trade-in may want to act fast, as that asset will be depreciating too. Eventually, but very possibly not before the end of 2023, supply and demand will drive price premiums back to normal.

CoPilot makes it easy for consumers to 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 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 around car prices, inventory, and sales. This December report covers data through November 30, 2022. 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 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.


Media Contact:

Kerry Close

kclose@groupgordon.com

732-609-2644



View Press Release