Used-Car Prices Are Finally Dropping (2024)

• Used-car prices are finally starting to return to reasonable levels.
• An iSeeCars.com study looked at more than 1.8 million used-car sales between February 2022 and February 2023 to track prices and identify which models had the largest price drops and gains.
• Turns out the Tesla Model 3 had the biggest price drop in the past six months—down 21.5%—while the average used car is down only 4.7%, according to the study.

After a couple of years of pandemic abuse, used-car prices in the US have finally taken a turn for the better, at least for consumers—dealers, unfortunately for them, will not be making as much as they have been recently. The overall drop from September of last year has been 4.7%, with prices plunging 8.7% across the board compared to this time a year ago.

The study by iSeeCars.com, “a data-driven car search and research company,” analyzed 1.8 million used-car sales between February 2022 and February 2023. The results are presented for two time periods: the last six months and the last year.

“A used-car pricing shift, from 7% positive to 8.7% negative, has occurred over the past six months,” said Karl Brauer, iSeeCars executive analyst. “If the trend continues we could see prices back at pre-pandemic levels by the end of year.”

AVERAGE 1-5-YEAR OLD USED CAR PRICES BY MONTH

But to be clear, while they’re dropping, prices are not as low as they were before the pandemic took over.

“The used-car market has fragmented over the past year,” said Brauer. “While prices are still higher than before the pandemic, they have consistently dropped over the past year and at an accelerated rate in the past six months.”

The Tesla Model 3 led the price plunge for the last six months, careening $11,302 from its average price last year to $41,337 now, a 21.5% reduction as that company’s CEO said whatever he dang well wanted to say and bought whatever he dang well wanted to buy, a practice that—turns out—affects the market.

The used-car model with the second-biggest drop in price since September was, of all things, the Nissan Kicks. That cute ute is now going for $3050 less than it went for six months ago, a 13.4% drop to an average transaction of $19,713. That was followed by the all-electric Nissan Leaf, which went down 12% to an average sale price of $25,734.

Among price drops for the last 12 months, the Infiniti QX80 full-size SUV dropped 22.3%, or $11,780, to an average price of $41,094. Its mainstream stablemate, the Nissan Armada, dropped 20.3% to $33,300, while the Land Rover Discovery dropped 19.9% in the last year to $40,841. The Tesla Model 3 was right behind those with a 19.3% price drop compared to a year ago, at $41,337 now.

TOP 10 USED CARS WITH THE GREATEST 6-MONTH PRICE DROPS

On the increase side, in the last six months luxury and sports car prices went up the most, led by the Mercedes-Benz S-Class and GLS, which rose over 11% to $87,981 and $67,700 respectively, and the Porsche 911, which rose 10.6% to a whopping $190,770 average price.

Among price increases for used cars over the last year, the 911 went up the most, by $21,913, or 13%, to that $190,770 figure. The next-biggest increase was half that of the Porsche: the humble Hyundai Sonata Hybrid was up 6.8% on the used-car market at $26,870, while the Chevy Bolt EV was up 5.9% to $25,819.

YEAR-OVER-YEAR CHANGE IN 1-5 YEAR OLD USED CAR PRICES

What does it all mean? Will new-car prices also come back down?

“As the pandemic fades and the supply chain improves, we’re also seeing prices for new cars fall,” said Brauer. “Most models are still priced above manufacturer’s suggested retail, but the margins between list price and MSRP are shrinking and should keep contracting for the rest of the year.”

So maybe it’s time to creep outside and go kick some tires. Let us know how that went in the comments below.