Used Car Demand Surges in January As Prices Fall for Seventh Consecutive Month
As sales volumes increase and dealer inventory diminishes, price declines have become more modest, and may even be poised to rebound
For consumers in the market for a used car, the current moment may represent the best opportunity to buy for the next several months
There has never been a better time in history to buy an electric vehicle, with used EVs prices down 3% in January and used Tesla prices down by 5%
Chicago, IL – February 6, 2023 – Despite continued interest rate hikes and record-high inflation, the chaos in the used car market shows few signs of abating, with sales actually increasing in January and dealers seeing their inventory start to dwindle. The strong demand in the market could be an early indication that used car prices will start to trend upward again, according to the latest data from leading car shopping app company CoPilot.
Used car prices declined for the seventh consecutive month in January. At an average of $30,472, they are now 9%, or $3,051, below last summer’s peak. However, prices fell by a modest 1% since December, slower than the previous five monthly price drops. CoPilot’s Return to Normal Index – which tracks how far used car prices currently are from expected normal levels – remains $7,139 (or 31%) above normal, showing the used car market still has a long way to fall.
Across all age brackets, prices continued to decline in January – though at modest levels. Nearly-new (1-3 year old) vehicle prices fell the least, dropping 1.6% to an average listing price of $39,610, which is 31.8% or $9,551 above normal for this age bracket. Pre-owned (4-7 year old) cars dropped by 1.9% to an average price of $28,827, while older (8-13 year old) used cars fell by 2.0% to an average listing price of $17,658.
Some sectors showed far more pronounced price declines in January. For instance, in the wake of Tesla and Ford’s price-cut announcements for new EVs, used EVs fell significantly in price, down 5% to an average listing price of $48,688. Volatile Tesla dominates the used EV category, and remains heavily in demand in early 2023, with sales surging 27% month-over-month. But with gas prices down, and new car discounts and tax rebates up, the price of the average used Tesla has dropped 29%, or $21,000 since the summer peak, and by 6% in just the past month. At an average listing price of $50,246, used Teslas are now commanding a relatively small 11% premium above normal (down from 50% in July). Only LandRover and Jaguar now have lower premiums among luxury brands.
SUVs continue to be the segment closest to returning to normal levels. Used SUVs were listed at an average price of $40,015, which is $5,831 (or 17%) above their projected normal levels. Over the past year, the Price Premium for used SUVs has fallen by 57%, from $10,441 (or 31%) above normal in January 2022.
“As used car prices continue to trend downward, consumers are again flocking to used car lots, more bullish on making a purchase than they have been in months,” said CoPilot CEO Pat Ryan. “However, we have yet to see the long-awaited major correction in the used car market – and this short-term spike in demand may delay that moment further. With employment strong and consumer confidence on the rebound, sales are increasing, and dealer inventory is shrinking. As a result, it’s a very real possibility that we may see used car prices increase again, particularly as we enter the busy tax refund season in February and March.”
“For consumers in the market for a used car, they should keep a close eye out and be prepared to make a move on the vehicle they want when they can find it, and if they are alert to short-term price drops,” Ryan added. “Over the past few weeks, some segments have seen price declines that are far more substantial than the overall market average – including electric vehicles, which have dropped by 3% in the past three weeks alone. While it remains a challenging used car market overall, we’ve yet to see a full market recovery. So if you can wait a few months, you’re likely to see prices fall further after March or April – but consumers who can’t afford to wait may want to consider a purchase before inventory shortages push dealers to again raise prices. And if you have a car to sell or trade-in, this is a good time to do that.”
About CoPilot
CoPilot is a leading, data-driven car buying app that provides consumers with an expert partner for high-consideration purchases, 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 free, embeddable data tools, including Price Pulse market trends, 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
732-609-2644
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