Used Car Prices: Are Used EVs and Cars Getting Cheaper?
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Everyone is sick of seeing how their favorite prospects for electric vehicles (EVs) and gas-powered used cars are too pricey. However, there might be a glimmer of hope on the horizon for fans of internal combustion engines (ICE) and EVs alike. Pricing trends in 2023 for used cars and even the cheapest electric cars reveal a respite from the stranglehold of swollen prices.
Are used cars dropping in price?
Fortunately for patient and exhausted car buyers in the United States, used car prices have dropped 5.8%. The news is a welcome development ahead of a used car market heavily impacted by inventory shortages and consistent demand.
Still, the news gets even better for electric car prices. Specifically, new EVs dropped 10%, while used electric car prices dropped around 20%, per iSeeCars’ latest study.
Are used cars still overpriced?
Compared to historic pricing, used cars are still expensive. However, affordability relative to household income has improved from 2022 to 2023. Better yet, current trends suggest that affordability is still improving into Q4 2023.
On the other hand, the latest data suggests that consumers may have to opt for a 7.5-year (90-month) loan to drop the monthly payment of a new car to tenable levels. What’s more, based on swollen interest rates, those loans could add $14,000 to the average new car monthly payment.
Which used cars are more affordable in 2023?
According to iSeeCars, 23 popular used cars became more affordable in 2023, including the perennially popular Tesla Model 3.
| Used car make/model | Price drop from Oct 2022 to Oct 2023 (%) |
|---|---|
| Tesla Model 3 | 28.9% |
| BMW i3 | 18.1% |
| Chevrolet Blazer | 16.6% |
| BMW 2 Series | 15.8% |
| Volvo S60 | 14.4% |
Interestingly enough, some luxury vehicles like the Alfa Romeo Stelvio and Genesis G70 also dropped around 10% from Q3 2022 to Q3 2023. However, the most shocking difference lies in the cheapest electric car in Tesla’s lineup, the Model 3. Still, the Model 3 isn’t the only EV to drop in price; lowered Tesla pricing trends have prompted lower costs for all used Teslas and legacy automakers’ EVs.
Why should you not buy a new car in 2023?
While many used cars dropped their average prices at the end of 2023, many new cars have done precisely the opposite. As a result, car buyers might want to rethink buying a few new car models in 2023 unless they’re prepared for the added expense.
| New car make/model | Price rise from Oct 2022 to Oct 2023 (%) |
|---|---|
| Toyota Prius Prime | 20.9% |
| Volkswagen Golf GTI | 10.7% |
| Hyundai Tucson Hybrid | 7.3% |
| Acura Integra | 3.7% |
| MINI Hardtop | 2.6% |
Rising costs and interest rates have worked in tandem to raise new car prices. In fact, monthly payments rose an average of 11.3%, a staggering increase for consumers. However, eco-minded shoppers will be shocked to find that the average new car price for a Toyota Prius Prime has risen as much as 20.9% from October 2022 to October 2023.
Will used cars be cheaper in 2024?
Used car affordability isn’t continuing to rise at the same rate that it did from June to August 2023. However, as long as household incomes continue to increase and used car prices continue to drop, it will be a better used car buying landscape for consumers in early 2024.
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