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At CarEdge, we understand that car insurance can be a complicated and confusing topic. With so many variables and factors at play, it’s hard to know exactly how much you should be paying for car insurance. That’s why we’re here to help break down the average cost of car insurance in 2023 and what factors may impact your rates. We’ll also look at why car insurance rates are rising so fast.
The Average Cost of Car Insurance Is Rising
According to NerdWallet’s 2023 rate analysis, the national average cost of car insurance has risen to $2,148 per year, or roughly $179 per month for full coverage insurance. However, it’s important to note that these are just averages, and your personal car insurance rate may vary based on several factors.
Factors that may impact your car insurance rates include your driving history, location, the type of coverage you select, and the make and model of your car. For example, if you have a poor driving record or a recent DUI, you can expect to pay more for car insurance than someone with a clean driving record and good credit.
To get an accurate quote for your specific situation, we encourage you to compare car insurance rates for free with CarEdge. In fact, 76% of drivers who shop around find a lower rate for the same coverage. So why not take a few minutes to see if you could be saving money on car insurance?
Despite a slight cooling in inflation, auto insurance prices are surging. How much have car insurance rates risen? Rates are up nearly 15% over the past year. A new report by Bankrate found that nationwide, premiums have risen more than $240 on average, topping $2,000 a year. Florida drivers saw the biggest jump, up nearly twice that amount to almost $3,200 a year. The higher cost of car insurance comes as supply chain issues are starting to ease, but the spike in repair costs is still driving insurance rates up across the board.
Insurance companies are fighting tooth and nail to spend less on claims. Claims tied up in court are one of the major driving forces for rising car premiums. “Most claims that are going through to the carriers are coming in with an attorney,” said Anakarina Callejas, an insurance agent at GreatFlorida who spoke to CBS News. “So, maybe a claim that could have been closed off rather quickly is now tied up in court, with higher and higher and higher expenses.” Those expenses are ultimately passed down to consumers.
Let’s take a closer look at how different factors may impact your car insurance rates.
Factors That Determine Auto Insurance Rates
Driving History
Your driving history is one of the biggest factors that can impact your car insurance rates. If you have a clean driving record with no accidents or violations, you can expect to pay less for car insurance than someone with a history of accidents or tickets.
For example, a good driver with good credit can expect to pay an average of $2,148 per year for full coverage insurance. However, if you have an at-fault accident on your record, that price could jump to $3,164 per year. And if you have a recent DUI on your record, you can expect to pay even more, with an average cost of $3,933 per year for full coverage insurance, according to NerdWallet.
Location
Florida is the state with the most expensive car insurance. Maine, Idaho and Vermont are the states with the cheapest car insurance in 2023. Source: Policy Genius
Your location can also impact your car insurance rates. If you live in a densely populated area with a high rate of accidents or thefts, you can expect to pay more for car insurance than someone who lives in a rural area.
For example, if you live in a city with a high rate of car thefts, your comprehensive insurance may be higher than someone who lives in a low-theft area. It’s important to consider these factors when you decide to shop around for better rates.
Type of Coverage
The type of coverage you select can also impact your car insurance rates. Full coverage insurance, which includes liability, comprehensive, collision, and additional insurance required by your state, is generally more expensive than minimum coverage insurance.
For example, a good driver with good credit can expect to pay an average of $685 per year for minimum coverage insurance, compared to $2,148 per year for full coverage insurance. However, it’s important to note that minimum coverage insurance may not provide enough protection in the event of an accident, so it’s important to consider your individual needs when selecting the right coverage.
Make and Model of Your Car
Finally, the make and model of your car can also impact your car insurance rates. We covered this in detail in a recent blog. Cars that are more expensive to repair or that have a high rate of theft may be more expensive to insure than cars that are less expensive to repair or have a lower theft rate.
For example, if you have a luxury car or a sports car, you can expect to pay more for car insurance than someone with a more modest vehicle. It’s important to consider these factors when selecting a car to purchase.
Several personal factors can impact your car insurance rates. Let’s break down some of the most common factors:
Driving Record: Your driving history is a key factor in determining your car insurance rate. If you have a clean driving record, meaning no accidents, DUIs, or other traffic violations, you can expect to pay less for car insurance than someone with a history of accidents or violations.
Credit Score: Your credit score can also impact your car insurance rate. Insurers use a credit-based insurance score to calculate rates in most states, which is similar to your regular credit score. If you have good credit, you can generally expect to pay less for car insurance than someone with poor credit.
Location: Where you live can also impact your car insurance rate. Insurance companies consider factors such as crime rates, population density, and weather patterns when setting rates for different regions. If you live in an area with a high crime rate or a lot of accidents, you can expect to pay more for car insurance than someone in a safer area.
Coverage Selection: The amount of coverage you select also affects your car insurance rate. If you opt for minimum coverage, you’ll pay less per month, but you’ll have less protection in the event of an accident. On the other hand, if you choose full coverage insurance, you’ll pay more per month, but you’ll have more protection in case of an accident.
Car Make and Model: The type of car you drive can also impact your car insurance rate. Cars that are more expensive to repair or replace can cost more to insure. For example, a sports car will generally cost more to insure than a sedan. These are the most and least expensive cars to insure today.
What You Can Do to Lower Your Car Insurance Rates
While some factors that affect your car insurance rates are out of your control, there are several things you can do to lower your rates:
Shop Around: Comparison shopping is one of the best ways to find a lower car insurance rate. CarEdge can help you compare quotes from multiple insurance providers for free, so you can find the best rate for the coverage you need. In fact, 76% of drivers who shop around find a lower rate for the same coverage.
Increase Your Deductible: Raising your deductible, or the amount you pay out of pocket in the event of an accident, can lower your monthly premium. However, make sure you can afford to pay the higher deductible if you need to file a claim.
Bundle Your Insurance: Many insurance companies offer discounts if you bundle your car insurance. You may want to bundle with homeowners or renters insurance.
Maintain a Good Credit Score: As mentioned earlier, your credit score can impact your car insurance rate. Maintaining a good credit score can help you qualify for lower rates.
Choose a Car That’s Cheaper to Insure: Before you buy a car, check with your insurance provider to see how much it will cost to insure. Choosing a car that’s cheaper to insure can help you save money on your car insurance rates. Check out the huge gap in insurance costs for new cars.
Final Thoughts
The national average cost of car insurance is $2,148 per year, according to NerdWallet’s 2023 rate analysis. However, your personal car insurance rate will vary based on several factors, including your driving history, location, coverage selection, and car make and model. By understanding these factors and taking steps to lower your rates, you can save money on car insurance without sacrificing the coverage you need.
Remember, comparing car insurance quotes is one of the best ways to find a lower rate. CarEdge can help you compare quotes from multiple providers for free, so you can find the best rate. Don’t overpay for car insurance – start comparing quotes today.
Buying a new car this year doesn’t mean you have to sacrifice safety for affordability. Check out these cars and SUVs that are not only surprisingly affordable, but also a Top Safety Pick by the Insurance Institute for Highway Safety. Without further ado, let’s take a look at the safest new cars in 2023.
The 2023 Acura Integra is a surprisingly affordable car with amazing fuel economy, and the highest safety ratings.
The 2023 Acura Integra is a 4-Door Sedan that is a perfect 5-seater choice for both single adults and families combined. Featuring a plethora of safety features, Acura outperformed in both crashworthiness and crash avoidance tests. It is no surprise that the IIHS awards its highest safety rating of Top Safety Pick + to this sleek beast. Acura Watch comes standard with this car and includes Collision Mitigation Braking System (CMBS), Road Departure Mitigation (RDM), Adaptive Cruise Control (ACC) and more. Finally, Acura’s Advanced Compatibility Engineering (ACE) body structure is next-level. The Integra has been carefully engineered to provide ultimate protection in the event of a frontal collision.
The 2023 Lexus ES 350 is an affordable midsize luxury sedan with decent fuel economy and a high safety rating.
The 2023 Lexus ES 350 is a 4-Door Midsize Luxury Sedan that is super chic for those that want a perfect mix of style and comfort, without breaking the bank. This 5-seater, spicy-looking car also outdid itself when it comes to safety features. IIHS gave it a Top Safety Pick for many reasons, including its crashworthiness and crash avoidance and mitigation. Featuring Anti-Lock Brakes, Stability Control, Additional Airbags, and Seatbelt Pretensioners, this beast was designed not just for your personal comfort but also your safety.
The 2023 Hyundai Sonata is a reasonably priced midsize sedan with good fuel economy and also a high safety rating.
If you’re in the market for a midsize sedan that combines style, safety, and performance, the 2023 Hyundai Sonata is definitely worth considering. This vehicle boasts a sleek and modern design, as well as a range of advanced safety features to ensure that you and your passengers are protected on the road. Being awarded the Top Safety Pick rating by IIHS can only be attributed to the 2023 Hyundai Sonata suite of safety technologies, including forward collision warning, automatic emergency braking, lane departure warning, and blind-spot monitoring. These features help you stay aware of your surroundings and avoid accidents, even in challenging driving conditions. In addition to its safety features, the Hyundai Sonata offers a comfortable and spacious interior, with plenty of legroom and headroom for both driver and passengers. This vehicle is fuel-efficient, making it a smart choice for daily commutes or long road trips.
The 2023 Mazda 3 is an affordably priced car with amazing fuel economy and very high safety rating.
If you’re looking for a compact car that combines style and safety, look no further than the 2023 Mazda 3. An IIHS Top Safety Pick awarded winner, the 2023 Mazda 3 features advanced safety technology, which include blind-spot monitoring system, rear cross-traffic alert, and lane departure warning. Additionally, the car has a range of airbags and a reinforced body structure to keep you and your passengers safe in the event of an accident. Despite its compact size, the Mazda 3 is surprisingly spacious and comfortable inside, with ample legroom and headroom for both driver and passengers. Finally, the Mazda 3 is a joy to drive, with smooth handling and a responsive engine. Whether you’re navigating city streets or cruising down the highway, this car offers a comfortable and enjoyable driving experience.
The 2023 Subaru Legacy is a reasonably priced car with standard all-wheel drive, and it’s one of the safest cars in 2023.
The 2023 Subaru Legacy is an award-winning midsize sedan that offers a winning combination of safety, reliability, and fuel efficiency. The vehicle has been named an IIHS 2023 Top Safety Pick, thanks to its advanced safety features and sturdy design. Equipped with Brake Assist, Brake Override System, Blind Spot Detection, Lane Change Assist, Rear Cross-Traffic Alert, a Rear Vision Camera, a collapsible steering column, and a Vehicle Dynamics Control system, the Legacy is designed to keep you and your passengers safe on the road..
The 2023 Volvo XC90 is a midsize luxury SUV with decent fuel economy and the highest safety rating.
The 2023 Volvo XC90 is a luxurious and stylish SUV that is sure to turn heads on the road. One of the standout features of the 2023 Volvo XC90 is its advanced safety technologies that earned it IIHS Top Safety Pick + rating, which include automatic emergency braking, lane departure warning, and blind-spot monitoring. The vehicle also features a reinforced body structure and a range of airbags to ensure that you and your passengers are protected in the event of an accident. In addition to its safety features, the Volvo XC90 offers a comfortable and spacious interior, with plenty of legroom and headroom for both driver and passengers. The vehicle is also equipped with a range of premium amenities, including leather upholstery, a panoramic sunroof, and a state-of-the-art infotainment system. Overall, the 2023 Volvo XC90 is an excellent choice for anyone looking for a luxurious, safe, and enjoyable SUV.
The 2023 Acura MDX is an affordable luxury SUV with good fuel economy and the highest safety rating.
The 2023 Acura MDX is a luxurious and spacious SUV. This vehicle boasts a range of advanced safety features, including the latest driver assistance technologies, making it one of the safest SUVs on the market. The 2023 Acura MDX has been named an IIHS Top Safety Pick+, which is the highest safety rating awarded by the organization. The vehicle features advanced safety technologies such as automatic emergency braking, lane departure warning, and blind-spot monitoring. Additionally, a reinforced body structure and advanced airbags provide protection in the event of an accident. In addition to its advanced safety features, the Acura MDX offers a comfortable and spacious interior, with plenty of legroom and headroom for both driver and passengers. Whether you’re navigating city streets or cruising on the highway, this car offers a comfortable and enjoyable driving experience.
The 2023 Volkswagen ID.4 is an affordable midsize luxury electric SUV with amazing fuel economy and the highest safety rating.
The 2023 Volkswagen ID.4 is an all-electric SUV that is designed to provide a safe, comfortable, and environmentally friendly driving experience. The vehicle features advanced safety technologies, making it one of the safest SUVs on the market, earning an IIHS Top Safety Pick+ rating. With automatic emergency braking, lane departure warning, and blind-spot monitoring, the Volkswagen ID.4 is ready to help you stay safe and avoid accidents. Additionally, the vehicle’s reinforced body structure and range of airbags provide additional protection for you and your passengers in the event of a collision. The Volkswagen ID.4 is powered by an electric motor, which provides instant torque and a smooth, quiet driving experience. Additionally, range is sufficient with up to 275 miles on a charge. Better yet, charging speeds have improved for the 2023 model year.
The 2023 Hyundai Palisade is a reasonably priced midsize luxury SUV with decent fuel economy and, it’s one of the safest new cars in 2023.
The 2023 Hyundai Palisade boasts a range of advanced safety features, including the latest driver assistance technologies, earning it an IIHS Top Safety Pick+ rating. Equipped with automatic emergency braking, lane departure warning, and blind-spot monitoring, the Hyundai Palisade is designed to help you stay safe and avoid accidents. Additionally, the vehicle’s sturdy design and a range of airbags provide additional protection for you and your passengers in the event of a collision. The vehicle is has a range of premium amenities, including leather upholstery, a panoramic sunroof, and a state-of-the-art infotainment system. The Hyundai Palisade features a robust V6 engine that provides plenty of power and a smooth, comfortable driving experience.
We’re Here to Help
In conclusion, prioritizing safety when purchasing a new vehicle is essential for protecting yourself and your loved ones on the road. With the wide variety of top-rated safest cars in 2023, there’s no need to compromise on affordability or fuel efficiency. To make the smartest buying decision, turn to CarEdge for comprehensive information and expert guidance on the best vehicles for your needs. Our platform offers valuable insights, comparisons, and in-depth reviews to help you confidently choose the perfect car that combines safety, performance, and value. Let CarEdge be your trusted partner in finding the ideal vehicle for a secure and enjoyable driving experience.
Hyundai Motor America and the NHTSA have issued a Hyundai recall for nearly 568,000 pickups and crossovers in the U.S. with potentially faulty trailer harness modules, posing a fire risk. The affected vehicles include 2019-23 Santa Fe midsize crossovers, 2021-23 hybrids, 2022-23 plug-in hybrids, and 2022-23 Santa Cruz compact pickups. Owners are advised to park their vehicles outside and away from structures until repairs are completed.
The Hyundai Recall: An Overview
On March 23, Hyundai and the U.S. NHTSA issued a recall notice that immediately impacted over half a million vehicles. These vehicles may be equipped with an accessory tow hitch assembly available for purchase through Hyundai or a dealership. Water accumulation on the tow hitch harness module printed circuit board (PCB) could cause an electrical short, leading to a fire. Hyundai has reported six incidents potentially related to this faulty component in the U.S., including one fire report and five reports of thermal damage isolated to the trailer harness module. No confirmed crashes or injuries have been associated with the issue.
The tow hitch module and wiring harness are manufactured by Korean auto supplier Segi. As an interim repair, dealers will inspect the module and remove the fuse as necessary. When the final repair is available, dealers will install a new fuse and wire extension kit. Dealers and owners will be notified starting May 16.
This year, Hyundai has issued six recalls affecting over 843,000 U.S. vehicles, according to NHTSA data. Kia America, a sibling company, is also recalling about 3,500 Carnival minivans for the same issue, with no reported fires, injuries, crashes, or deaths. The tow hitch harness supplier for Kia vehicles is Mobis Parts America.
Hyundai’s History with Recalls and Class Action Settlements
This Hyundai recall follows millions of vehicles recalled in 2022 due to a separate fire risk. Previously, Hyundai and Kia owners began suing the automakers in 2015 after they refused to pay for repairs or replacements of the Theta II engine. Unsurprisingly, Hyundai eventually settled the class-action suit.
The plaintiffs in the lawsuit alleged that the Class Vehicles suffered from a defect that could cause engine seizure, stalling, engine failure, and engine fire. They also claimed that engine seizure or stalling could be dangerous if experienced and that some owners and lessees had been improperly denied repairs under the vehicle’s warranty. HMA and HMC denied the plaintiffs’ allegations.
The affected “Class Vehicles” included 2011–2019 model year Hyundai Sonata, 2013–2019 model year Hyundai Santa Fe Sport, and 2014–2015 and 2018–2019 model year Hyundai Tucson equipped with 2.0 liter and 2.4 liter genuine Theta II gasoline direct injection engines within OEM specifications.
There’s More: A New Hyundai Class Action Settlement
In early 2023, an additional 2.1 million vehicles were included in a Hyundai and Kia class action settlement. While the previous settlement covered vehicles equipped with Theta II gasoline direct injection (GDI) engines, a more recent settlement aims to resolve several cases that claimed the automakers’ Theta II 2.4-liter multipoint fuel injection (MPI), 1.6-liter Gamma GDI and 2.0-liter Nu GDI engines are plagued by the same defect, which can allegedly cause engine seizures, failures and even fires.
The latest Hyundai recall affecting nearly 568,000 vehicles in the U.S. highlights the importance of addressing potential fire risks in vehicles. Owners of affected Santa Fe and Santa Cruz models are advised to park their vehicles outside and away from structures until necessary repairs are completed. Hyundai’s history with recalls and class-action settlements underscores the need for automakers to prioritize safety and customer satisfaction. Owners should stay informed about any recalls and take appropriate action to ensure their vehicles are safe and well-maintained.
In recent Ford news, the automotive giant has revealed that it expects its electric vehicle business to incur a loss of $3 billion in 2023. This comes despite the company forecasting increased profits from its internal combustion and commercial vehicle operations. Ford’s losses from its EV unit, Model e, are projected to rise by nearly 50 percent this year. Losses are attributed to the company’s investments in expanding production and developing next-generation Ford EVs on a dedicated platform.
Ford Earnings News
Ford announced that it anticipates around $7 billion in earnings before interest and taxes (EBIT) this year for Ford Blue, its internal combustion business unit, and about $6 billion for Ford Pro, its commercial unit. These units generated $6.8 billion and $3.2 billion in 2022, respectively, contributing to the company’s overall adjusted EBIT of $10.4 billion and a net loss of $2 billion.
It has long been assumed by analysts and investors that Ford’s traditional gasoline-powered vehicle business has been the primary driver of profits, helping to fund investments in Ford EVs and other mobility ventures. Thursday marked the first time Ford publicly disclosed the financial results of its three units, which were created in 2022. This new financial reporting method no longer details regional performance, such as North America, Europe, and China.
Ford’s electric vehicles, such as the popular Mustang Mach-E, are currently facing losses, which Lawler explained are to be expected. “Ford Model e is an EV startup within Ford. As everyone knows, EV startups lose money while they invest in capabilities, develop knowledge, build volume and gain share.” The increased losses this year are attributed to investments in building manufacturing complexes in Tennessee and Kentucky, as well as exploring alternative battery chemistries.
Ford EVs? Full Steam Ahead
Despite these challenges, Lawler assured that Ford would be “approaching contribution margin break even” on EVs by the end of this year. Ford aims to achieve a production capacity of 600,000 EVs annually by the end of 2023. They’re targeting the ability to build 2 million Ford EVs per year by 2026.
In the meantime, the Ford Pro unit expects to nearly double its earnings this year as it prepares to launch a new Super Duty line of pickups and increase output of its E-Transit van. Lawler said, “Ford Blue and Ford Pro are both solidly profitable today and well-positioned for growth.”
Ford’s Electric Vehicle Lineup Is Growing
F-150 Lightning
Price: $57,896 – $98,869+
The 2023 Ford F-150 Lightning is an impressive electric pickup truck with a powerful 580 horsepower Extended-Range battery that can hit 60 mph in just 4.0 seconds. With a sleek design that closely resembles its gasoline-powered counterpart, the Lightning offers EPA-estimated driving ranges of 230 to 320 miles, depending on the battery pack. However, towing can significantly impact range and charging frequency. Despite these limitations, the F-150 Lightning remains an ideal choice for truck owners who tow infrequently or for short distances. This year, the Lightning’s price has increased dramatically due to supply-chain constraints, rising material costs, and market demand, with entry-level Pro models seeing a $12,000 hike and higher-end trims experiencing increases between $6,000 and $7,000.
Ford Mustang Mach-E
Price: $47,495 – $77,195
2023 Ford Mustang Mach-E interior
The 2023 Ford Mustang Mach-E, priced between $47,495 and $77,195, is a versatile electric crossover offering numerous configurations and equipment packages to suit various preferences. Buyers can choose between the feature-rich Premium model or the high-performance GT. While it may not be a traditional Mustang, the Mach-E boasts impressive agility, speed, and style, as well as a well-equipped interior. Driving range is above average at over 300 miles for some trims. It won Car and Driver’s EV of the Year award in 2021. For the 2023 model year, the Premium trim’s estimated range increases to 290 miles. Ford’s Co-Pilot360 driver-assistance technology now comes standard across the lineup. The new Mustang Nite Pony package is available for selected Premium and GT Performance Edition models.
Ford E-Transit
Price: $43,295+
The 2023 Ford E-Transit is an all-electric cargo van designed to enhance productivity for commercial customers. It comes in eight different configurations, including three roof heights and three body lengths, as well as cutaway and chassis cab versions. The E-Transit offers a targeted range of 126 miles for the low-roof cargo van configuration, based on a 68 kWh usable battery capacity. This electric workhorse is part of Ford’s strategy to invest over $30 billion in electrification through 2025. The E-Transit is ideal for fleet operators looking for lower maintenance costs and eco-friendly operations.
Can Ford Navigate EV Losses Amid Rising Profits for Traditional Vehicles?
Ford expects a $3 billion loss in its electric vehicle business in 2023, despite increased profits from traditional vehicle divisions. These losses are attributed to investments in manufacturing complexes and alternative battery chemistries. Ford remains confident in achieving breakeven contribution margin on EVs by year-end. With a growing EV lineup, Ford aims to enhance productivity for customers while supporting environmentally conscious operations. Despite current challenges, the automaker is investing $30 billion in electrification through 2025.
The latest iSeeCars.com analysis has revealed a significant shift in used car prices in 2023, with prices dropping by 4.7 percent since September and 8.7 percent from a year ago. The study analyzed 1.8 million used car sales between February 2022 and February 2023 to identify used car pricing trends and which models experienced the biggest price increases and decreases. As a company that prioritizes transparency and fairness in the automotive industry, CarEdge is here to help you understand these trends so you can make smarter car buying decisions.
Fragmentation in the Used Car Market
According to iSeeCars’ executive analyst Karl Brauer, the used car market has fragmented over the past year. Although used car prices remain higher than pre-pandemic levels, they have consistently dropped over the past year, with an accelerated decline in the past six months. This fragmentation presents an opportunity for consumers to find better deals on used vehicles as the market adjusts to evolving conditions.
Biggest 6-Month and Year-Over-Year Price Drops
The cars with the biggest price drops in the past six months, Source: iSeeCars.com
In terms of used car prices, the Tesla Model 3 experienced the most significant drop in the last six months, with a decline of 21.5 percent. Other vehicles like the Nissan Leaf and several hybrid models also saw significant price drops ranging from 11 to 22 percent over the same period. Luxury models like the Jaguar E-Pace and two Land Rovers were among the vehicles with the largest year-over-year price declines.
Tesla’s used car prices plummeted after Tesla suddenly slashed new Tesla prices by up to 13% overnight. Combined with the fact that used Tesla’s don’t qualify for the used EV tax credit (unless you’re lucky enough to find one under $25,000…), Tesla prices are likely to remain suppressed for now.
Take a look at the steady and steep price drops for this 2019 Tesla Model 3. These are the kinds of changes we’re seeing with used Teslas nationwide.
Interest rates have climbed tremendously year-over-year, and that’s certainly a leading factor in the decline of luxury car prices. The more buyers borrow, the more they owe in interest. But that’s not always the case, as we’re about to see.
Models with the Biggest Price Hikes
The cars with the biggest price increases in the last six months. Source: iSeeCars.com
Despite the overall downward trend in used car prices in 2023, some models have experienced price increases over the past six and 12 months. Luxury vehicles, in particular, have seen price hikes, indicating that wealthier consumers are still willing to spend over the manufacturer’s suggested retail price (MSRP) to get the vehicle they desire. Fuel-efficient vehicles like electric cars, hybrids, and hatchbacks have also seen price hikes in response to the increase in fuel prices over the past year.
Hybrid Models Holding Up, Electric Vehicles Dropping Fast
Price change by fuel type, 2022-2023. Source: iSeeCars.com
Used hybrid vehicles have fared relatively well in the market, with prices dropping only about 2.1 percent in the past 12 months. The increase in fuel prices between February 2022 and February 2023 has heightened demand for fuel-efficient hybrids. On the other hand, used electric vehicles have seen a 13.9 percent price drop in the past year, which may be attributed to consumer reluctance to pay higher prices for used EVs amidst inflation and rising interest rates.
Vehicle Type Trends: Coupes, Hatchbacks, SUVs, and Minivans
Price change by vehicle segment. Source: iSeeCars.com
When examining used car prices by vehicle type, coupes have actually increased in value compared to a year ago, possibly reflecting the strength in the luxury market. Hatchbacks and pickup trucks have seen the smallest price drops, while minivans and SUVs have experienced value losses of around 10 percent over the past year.
As the pandemic subsides and the supply chain improves, new car prices are beginning to fall, albeit still priced above the MSRP. However, the gap between list prices and MSRP is shrinking, and it is expected to continue contracting throughout the year. Dealers may be paying more for used cars at the wholesale level, but retail pricing does not reflect this, suggesting a compression in profit margins on used cars.
Black Book: Unexpected Growth in Wholesale Used Car Market Surpassing Seasonal Trends
The latest wholesale used car price trends as of 3/21/2023. Source: Black Book
According to recent data from Black Book, the wholesale used car market has been experiencing remarkable growth, with gains far surpassing the typical trends for this time of year. Pre-COVID, some segments would begin to see positive movement, but this year has already witnessed six weeks of consistent increases across most segments.
The overall Car segment grew by 0.63% last week, compared to a 0.46% increase the week prior. Out of the nine Car segments, seven saw growth last week. Sporty Cars, for example, picked up momentum with a 1.17% increase, marking nine consecutive weeks of growth. While the Prestige Luxury Car segment continued to decline, it experienced the lowest single week drop since July 2022.
The volume-weighted, overall Truck segment also increased by 0.43%, mirroring the increase from the previous week. Among the thirteen Truck segments, eleven reported growth last week. The Compact Crossover segment led the way with a 0.92% gain, marking the third consecutive week it held the top spot among Truck segments. Despite these increases, Compact and Full-Size Vans continued to experience a decline.
Navigate Today’s Changing Market With Expert Help
CarEdge is committed to helping you navigate today’s changing auto market. By understanding the shifts in used car prices in 2023, we hope to empower you to make the best possible car buying decision for your needs and budget. For more information on how we can help you save more today, check out our car buying help options below.
What do you think? Will car prices continue on this trajectory, or is another sudden shift around the corner?
CarEdge Insights
