After inflating during the COVID-19 pandemic, the air is beginning to leak from used car prices.
The used car market has shown signs of stabilization over the past year, with the average price of one- to five-year-old used cars settling around $29,934, a modest decrease of 1.4% from last year.
That follows a period of significant price increases during the pandemic, where prices surged by 28% in November 2021 compared to the previous year, mainly because of a shortage of new cars.
However, the market has now found a balance, with prices fluctuating by less than 3% over the past six months, according to a recent iSeeCars study that analyzed over 1.3 million used cars sold between November 2023 and November 2024.
The November Consumer Price Index shows the cost of used cars rose 2% last month but is down 3.4% over the last 12 months.
Electric vehicle prices are still falling
That said, the electric vehicle (EV) segment continues to experience notable price declines. The average price for used EVs has dropped by 18.4% over the past year, bringing the average cost to $27,615, which is 8% below the average used car price. This trend may reflect a growing skepticism among used car shoppers towards EVs, despite their increasing affordability.
Tesla leads the decline in used car prices by brand, with a significant 21.2% drop over the past year. Following Tesla, Stellantis brands such as Maserati, Alfa Romeo, Ram, Chrysler, Dodge, and Jeep have also seen substantial price reductions, ranging from 12.3% to 4%.
In contrast, brands like Acura, Chevrolet, Toyota, and Genesis have seen their used car prices increase by 2.8% to 1.7%, likely due to restricted supply and increased demand.
“Buyers waiting for used car prices to come down can probably stop waiting,” said iSeeCars Executive Analyst Karl Brauer. “Prices have barely moved over the past year and it appears $30,000 is the new $20,000 for used car shoppers. That number likely prices a lot of consumers out of the one- to five-year-old used car market, forcing them to consider older, higher-mileage models.”
Used EVs are cheaper than gas-powered cars
Despite the overall market stability, the EV segment's continued price decline, albeit at a slower pace than earlier in the year, indicates a potential plateau in the near future. The average used EV price, now below that of traditional vehicles, suggests that consumers are willing to consider EVs when they perceive a good deal compared to gasoline models.
The study also highlights that while some brands have maintained or increased their value, others, particularly luxury and non-luxury vehicles across various body styles, have experienced significant price drops. Brauer says this trend offers used car shoppers a wide range of options to save money on their next purchase.