Used car prices have started to fall after experiencing a meteoric rise in the wake of the pandemic, according to a recent study. The price of the average used car fell by 2% in November 2022 and dropped again by 3% in December 2022, though some models bucked this trend.
"We're still a long way from 'normal' but there are clear signs the elevated prices of the past two-plus years are coming to an end," said iSeeCars executive analyst Karl Brauer. "It was easy to predict given the macroeconomic factors we’ve seen over the past six months."
The average used car cost $31,823 in November 2022 ($697 less than in November 2021) and $33,582 in December 2022 ($1,043 less than in December 2021). Tesla's Model 3 earned the dubious distinction of being the biggest loser: the average cost of a used example fell by $8,822 to $43,817 between September and December 2022. The Nissan Kicks and the Ford Mustang fell by 11.9% and 11.5% to $20,046 and $26,852, respectively, followed by the Hyundai Ioniq Hybrid with a decline of 11% to $20,542. That doesn't mean you're about to get a good deal, though. These models are outliers, and the industry average dropped by merely 0.6% from September to December 2022.
Comparing prices in December 2021 to those in December 2022 reveals that the Nissan Armada lost more value than any other car; it fell by 16.9% ($6,846) to $33,621. Ford's Expedition Max and Jaguar's E-Pace took second and third, respectively, with 15.2% and 14.6% drops.
Meanwhile, some used cars went up in value. The average cost of a used Toyota Prius Prime increased by 22.5% to $32,131 between December 2021 and December 2022, while the Nissan Leaf and the Chevrolet Bolt went up by 20.9% and 20.8%, respectively. Looking at how prices evolved from September 2022 to December 2022 puts the Cadillac Escalade, the Porsche 911 and the Mercedes-Benz S-Class on the top three spots of the podium. Prices jumped by 14.9%, 14.8% and 13.6%, respectively, during the last few months of the year.
Classifying cars by body style and powertrain type reveals a couple of interesting trends. Used hatchbacks — which every carmaker's product planning department will tell you no one in America wants to be seen in — increased in value by 7.7% from December 2021 to December 2022; that's the biggest jump on the chart. Used coupes — another body style whose appeal is allegedly declining — went up by 4.8%, followed by used station wagons (!) with a 0.3% increase. The cost of used sedans, trucks, SUVs, convertibles and minivans fell in 2022. Used hybrids gained 9.5%, while the average cost of a used electric car fell by 3%. There's no word on how diesel-burning cars fared.
"Prices are still above pre-pandemic levels, but every indication suggests they will continue to fall," the study concluded.