Used car prices continue to fall with EVs most affected 

According to an analysis by iSeeCars.com, the price of used vehicles has declined from between 2% to 7% over the past year, with the average decline being mostly driven by the sharp drop in prices of electric vehicles (EVs). 

More consumers have switched to electric cars in recent years as rising gas prices have made them more appealing. The research found that EV prices have fallen by nearly 32% in the last 12 months, with the price of used Teslas plummeting, in particular.  

In practical terms,  someone who invested in a new EV just a year ago may find themselves facing the unsettling reality of their vehicle’s depreciated value, potentially rendering them “underwater” on their car loans, as their vehicles may have lost up to a third of their initial value.

This is important information for prospective buyers to consider when making a purchase. While the reduced prices may appear appealing initially, there’s no guarantee that the vehicles won’t further depreciate at a rapid pace.

The price reductions may also be attributed to dwindling demand for EVs, prompting both new and used car dealers to adjust prices downward to stimulate sales.

According to the iSeeCars analysis, the average price of a used car now stands at $31,153, marking a decline of 3.6%, equivalent to a $1,161 decrease, compared to the previous year. In contrast, used hybrid vehicles have experienced a steeper decline, with prices dropping by approximately 6.5%, translating to a $2,135 reduction. 

However, the most striking depreciation has been observed in the EV market, with prices plummeting by a staggering 31.8%, amounting to a substantial loss of $14,418 in value.

Used Teslas have seen their prices decline by 28.9%. Notably, only a handful of brands, including Chevrolet, GMC, and Porsche, have bucked the trend, with slightly higher EV prices observed over the past 12 months.

The analysts at iSeeCars also noted: “Used car shoppers are seeing a bit of a break in vehicle costs, but we’re still well above the pre-pandemic average used car price point of roughly $20,000, with no indication we’re going back to those levels any time soo. A dramatic drop in used electric vehicle values, largely driven by Elon Musk’s aggressive price cuts on new Teslas, reflects how much influence Tesla continues to have on the EV market.”