After ratcheting up for the better part of three years, used car prices have started to fall. They were driven higher primarily by a shortage of new cars due to breaks in the auto parts supply chain. Car manufacturers could not sell what they could not produce. Used cars became the only option. (These are the best- and worst-built cars in America.)
The increase in used car prices worked against a decade-long trend. Car quality had become so strong that a car on the road in America had an average life of 12 years. People could hold on to their vehicles for 10,000 miles or a year longer.
However, used car demand and prices were pressed higher by another factor. Rates for car loans, even for people with mediocre credit, were historically low because of the actions of the Federal Reserve. Consumers bought used cars because they could afford them.
Now, the Fed has pushed interest rates higher. At the same time, the supply of new cars has increased. This, in turn, has driven used car prices lower.
According to a new study by research firm iSeeCars, in February, used car prices were down 8.7% year over year. iSeeCars executive analyst Karl Brauer commented, “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 6 months.”
To come to its conclusions, iSeeCars.com reviewed over 1.8 million sales of one- to five-year-old used car in February 2022 and February 2023. The average listing price of each model was compared between these periods. These differences were measured as a percentage difference from the 2022 price. The absolute price was measured in the same way.
The car with the largest price drop is the Infiniti QX 80, with a decline of more than 22%.
These are the used cars with the largest price drops in the past year:
- Infiniti QX80 (−22.3%)
- Nissan Armada (−20.3%)
- Land Rover Discovery (−19.9%)
- Tesla Model 3 (−19.3%)
- Land Rover Range Rover Velar (−19.2%)
- Jaguar E-PACE (−17.9%)
- Audi S5 Sportback (−17.6%)
- Audi SQ5 (−17.2%)
- Jaguar F-PACE (−16.8%)
- Mercedes-Benz CLS (−16.3%)
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