Electric Vehicles Lead Used Car Market’s Return Towards Normal, As Prices Fall Faster Than Ever
Used SUVs are the segment closest to returning to normal pricing levels, with a month-over-month price drop of $1,000 translating to substantial savings for buyers
However, used car prices on average remain 30% above projected normal levels, indicating the market still has a long way to fall before reaching pre-pandemic levels
Tax refund season in February and March can be a good time to sell or trade in your car
Chicago, IL – January 10, 2023 – Used car prices have fallen for the sixth consecutive month in December, recording their largest-ever monthly price drop (of $692) since the start of the COVID-19 pandemic, according to new data and analysis from leading independent car shopping app CoPilot. However, now listed at an average price of $30,899, used cars are still priced 30%, or $7,146 above normal. CoPilot estimates, at the current rate of price drops, the market will take between 10 and 11 months to return to normal, pre-pandemic levels.
Though the market overall remains elevated above normal levels, used SUVs and minivans are showing the strongest signs of initial recovery. In December, used SUV prices fell $1,073 (or 3%) month-over-month, to an average of $40,220. Meanwhile, used minivan prices fell by $585 (or 2%) since November and have an average listing price of $24,214.
However, electric vehicles and hybrids – which saw the most dramatic run-up in prices when gas prices skyrocketed in the spring of 2022 – have now seen the most significant price drops. Used electric vehicles have fallen by 24% from their peak pricing levels in July, and now have an average price of $51,516, while used hybrids (now listed at an average price of $41,897) have fallen by 16% from their July peaks.
Among non-gas powered vehicles, Teslas have seen the most staggering price drops since gas prices first started to ease in the summer: They’ve plummeted by 25%, or almost $20,000 each, from an average price of $71,325 in July, to $51,516 in December 2022.
“While we are seeing consistent price-drops across all market segments, and we’re starting to see these price drops accelerating, the market still has a long way to go before we see a more complete correction,” said CoPilot CEO and Founder Pat Ryan. “Even though we’re seeing some parts of the market - such as SUVs, minivans, and EVs – with significant early declines, there are much more significant price declines ahead for the market overall. As dealers take delivery of more new car inventory in 2023, this increasing supply will flow through to lower prices in the used car market.
“There are a limited number of case-by-case scenarios – such as those consumers in the market for a new car who also have a lot of equity invested in their current vehicle – who might consider whether now is the right time to trade-in, and lock in their gain,” Ryan added. “In fact, with tax refund season coming, February and March can be a relatively good time to sell or trade-in, because dealers will be busier and therefore more likely to pay more for your car. But for the vast majority of consumers, if they can hold off on making a purchase, they absolutely should, as they’ll get more car for their money in the months ahead.”
Over the past year, foreign brands have fallen the most substantially in price (compared to domestic and luxury brands), dropping by 7%. Furthermore, among foreign brands in December, used Kias had the highest Price Premium, listed at $6,378, or 40%, above projected normal levels. Meanwhile, used Fords saw the highest Price Premium, listed $7,017, or 28%, above projected normal, while used Porsches had the highest Price Premium among luxury brands, listed at $15,567, or 23%, above projected normal.
CoPilot is a leading, data-driven car buying app that provides consumers with an expert partner for the high-consideration purchase process starting with car buying and ownership. The platform combines powerful data backed by human expertise to introduce transparency to the shopping, purchasing and ownership journey. The mobile application takes the time, frustration, and guesswork out of the process, empowering people to easily navigate the risks of shopping for high-value items, and to buy with confidence at the right price and the right time.
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.