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There’s a troubling trend emerging in the auto industry. Automakers are dropping base models from their lineups, effectively increasing the starting price by thousands of dollars. Toyota, Honda, Mazda and Kia have all done this in recent months, and it’s likely to continue in 2023. New car prices are increasing in 2023, but prepared buyers can still negotiate to save money.
Here are 10 models seeing big MSRP increases in 2023, and how you can still negotiate a better deal.
Ford F-150 Lightning
2023 Ford F-150 Lightning Lariat, with 320 miles of range.
2023 Pricing: From $59,974 to $97,819 (+40% since 2022)
2022 Pricing: From $41,669 to $93,609
When Ford launched the all-electric F-150 Lightning in early 2022, the price seemed too good to be true for many reviewers. Was Ford really going to offer so much value for well under $50,000? It turns out that was indeed too sweet of a deal to last. Ford has since announced multiple price increases for the entry-level F-150 Lightning Pro. In 2023, the starting price of the Lightning Pro is 40% higher than the original price one year prior.
The all-new Kia EV6 and it’s sibling the Hyundai IONIQ 5 were welcomed with rave reviews. Up to 310 miles of range, ultra-fast charging and unique looks, what’s not to like? Perhaps the EV6 is too popular, because Kia raised the starting price by $7,100.
Dropping the base model is a troubling trend, and Mazda is jumping onboard. With the elimination of the Mazda CX-9’s base model, the starting price of the CX-9 has jumped 8.4% to $40,025.
You know new car prices are increasing when Honda bumps prices by 16%. The CR-V is moving further and further away from the budget label it once wore. By percent increase, the CR-V’s 2023 pricing has increased more than almost every other mainstream vehicle on the market. At least it looks sharper with the refreshed design.
Back in 2019, a Tundra could be bought brand-new for under $33,000. Today, your more likely to see starting prices closer to $40,000. The days of full-size trucks under $30,000 are gone.
It feels like just yesterday that the Compass was available for under $25,000 with incentives. Today, the Compass starts well over $30,000 out-the-door.
Although the base Palisade gets a more modest $1,600 price bump, the trim level most buyers will be interested in, the Palisade XEL, goes up by $2,300 in 2023.
Honda decided to drop the cheapest base model of the 2023 Civic. After dropping the Civic LX base model, the entry-level price for the Civic climbed by 8%.
Used car prices are down 17% at the wholesale level, and retail prices are finally coming down. New car prices remain at all-time highs, reaching a new record average transaction price of $48,681 in November. Will new car prices drop in 2023? It depends if you’re shopping new or used. Expect used car prices to continue a steady decline through at least the first half of 2023. For new cars, it’s a bit more complicated.
With new car prices, most analysts agree that the best we can hope for in 2023 is competitive financing offers (even as rates rise), the return of incentives to an extent, and hopefully the end of dealer markups for most models. With the 2023 model year pricing, automakers have raised sticker prices by 3% to 8% for most models. New car inventory is finally climbing out of the semiconductor-driven shortages of late 2021 and early 2022, but automakers don’t plan to even return lot inventory to normal? Why? They now know that they and their dealer networks can make a lot more money by keeping inventory slim, doing their best to keep the auto market in a perpetual ‘buyer’s market’.
With the new and used car markets on the verge of lower prices, it’s time to put negotiation skills to work to save money on your car deal. Our team of Car Coaches is made up of industry pros with decades of experience selling cars for dealerships around the United States. Now, they’re sharing industry insights that dealers don’t expect you to know, all with the goal of saving you money, time and hassle.
Here are some 100% free resources our team of Car Coaches has created to help you navigate car buying in 2023.
If you’re looking for a used car deal this year, understanding the ins and outs of today’s changing used car market is key to saving more. In 2023, car buyers who are empowered with knowledge and negotiation know-how will save the most money. Those who are caught off guard are destined to overpay. At CarEdge, we’re real people helping you save real money. Our team is sharing which used cars are likely to have the best deals in 2023, and what to be mindful of along the way.
Used Car Prices Continue to Drop – Some More Than Others
At the wholesale markets, used car prices have steadily dropped since mid-2022. Industry analysts are noting price declines on every front. As of November’s data, the Manheim Used Vehicle Value Index shows that used car prices are down 14.2% from one year prior. Digging into the details, we can see that some used car segments are dropping faster than others.
SUVs (including crossovers) have seen prices drop the most over the past year, dropping -16.4% since November 2021. Next up are luxury cars, which have had prices drop -15.6% on average over the past year. Here’s the year-over-year price drop breakdown for the vehicle classes with the greatest price declines, as of early 2023:
SUV/crossovers: -16.4%
Luxury cars: -15.6%
Midsize cars: -14.4%
Trucks: -11.9%
Vans: -11.6%
Compact cars: -10.6%
Full-size cars, subcompact cars, sports cars and luxury SUVs/crossovers all saw prices drop year-over-year, but saw declines below the overall industry average.
See the latest used car price data from Manheim here.
In 2022 (green), car prices began to decline.
Black Book’s used car price data shows the same picture overall, with greater resolution. All 22 vehicle classes in Black Book’s wholesale used car auction weekly analyses have seen prices drop over the past six months. Wholesale transaction prices are easiest to track, hence the industry-wide focus on them.
Typically, wholesale price trends are reflected in retail prices with a 3-6 week delay.
At the wholesale level, used car prices began to fall in the overall market in mid-June of 2022. By early August, retail prices were also dropping. By 2023, retail used car prices had been dropping for nearly five months. Generally, used vehicle classes that saw the most price appreciation in 2021 have seen the greatest price drops, as they’ve had the farthest to fall.
According to Black Book transaction data, these are the used car segments with the greatest drops so far:
Luxury cars
Luxury SUVs/crossovers
Mainstream SUVs/crossovers
And these are the used car segments with the smallest price drops:
Vans
Subcompact cars
Sports cars
Understanding market price trends is the first step towards becoming a well-prepared used car buyer in 2023. Will these trends continue? Let’s take a closer look.
Be Wary of Depreciation in 2023
Used car prices are very likely to continue dropping in 2023.
Why are used car prices so likely to drop further?
New car inventory is now the highest it has been since 2020. More buyers are considering new models, reducing demand for used cars.
Interest rates for auto loans have doubled since 2021. The average used car loan APR is now close to 14%, while new car loan APRs average 14%.
Fears of an economic recession have led more would-be buyers to save a bit more, and spend less. More on how recessions affect car sales and prices here.
What does this mean for you if you’re likely to buy a car in 2023? Don’t overpay, because the deals will be out there.
The Best Used Car Deals in 2023
Our team of CarEdge Auto Experts help car buyers negotiate amazing deals every day. They’re as knowledgeable about the used car market as it gets, and they put their auto industry know-how to use saving our members money. These are the used vehicles they expect to have the best deals in 2023.
Phil, CarEdge Auto Expert: “I think the compact and midsize crossover segments will continue to see good deals. For example, Toyota RAV4s and comparable crossovers continue to see declines in retail pricing. This falls in line with compact to midsize vehicles. These have seen the highest appreciation in the last 12 months, and now they are seeing a large decline to offset that. Also, anyone looking for a used luxury vehicle should see some continued deals with values coming down.”
Jerry, CarEdge Auto Expert: “I expect to see deals/prices improve in near-new vehicle segment, primarily full-size trucks. As new vehicle shortage is improving, deals and incentives are improving, which will slowly bring back the price relationship between new and used prices. We are already seeing this, as there are discounts to be found of up to $8-10k on new, full-size trucks. This will push down the prices of near-new. Deals/availability in the up-to $20k segment will continue to be challenged.”
Mario, CarEdge Auto Expert: “With increasing incoming units and in-stock inventory on dealer lots (Toyota, Audi, BMW, Hyundai, Honda, and Subaru, for example), we are slowly moving away from reserving allocations or factory ordering, except for low volume models like EVs and Hybrids. For domestics it will always be an option, but even F150s and Wranglers have good stock on the ground in big markets.”
Justise, CarEdge Auto Expert: “Used sedans, and trucks are the best segment. Honda is still hard to negotiate but everything is getting much easier. The best deals are on Toyota, with new prices finally so negotiable used Toyotas can be gotten for a steal. All Jeeps are still very negotiable right now.”
Our CarEdge Coaches were quick to point out that so much has changed in the auto market over the past six months, and that a lot more will change before 2023 ends.
How to Save Money Buying a Used Car
CarEdge is the largest consumer advocacy in the auto industry today. We help real people save real money on car deals. That’s why we share hundreds of free guides and resources in addition to the full benefits savings available for our members.
Shop Needs Versus Wants
If you need a family hauler, say no more. But how many seats do you really need? It’s worth thinking about. Does it make the most sense to buy a vehicle for an outlier use-case scenario, such as taking one or two big road trips per year? Usually, it doesn’t.
For example, consider the differences in MSRP and fuel economy between a popular three-row SUV and a crossover. The 2023 Hyundai Palisade Limited starts at $46,800, but the slightly smaller 2023 Hyundai Santa Fe Limited starts at $40,050. Take it down a step further, and you can get a Hyundai Tucson Hybrid for under $39,000. That would be 37 miles per gallon in the Tucson Hybrid, compared to just 22 MPG in the Palisade, totaling $800 in annual fuel savings for the average American driver.
Take the cost of financing and fuel into account, and you’ll quickly realize that A LOT of money can be saved by shopping for everyday needs, rather than wants or ‘what ifs’.
Get the Lowest Rate Possible
Did you know that the average interest rate APR for a used car purchase is nearly double that of a new car? Sad, but true. According to Experian, The average auto loan interest rate was nearly 8% APR for new cars and 14% for used cars in late 2023. While percentages may seem insignificant on the surface, they have a huge impact on your monthly payment, and how much total interest you’ll owe over your loan term.
Don’t Buy Without a Pre-Purchase Inspection
A pre-purchase inspection is a vehicle inspection that an independent mechanic conducts in advance of a vehicle sale. There is no universal checklist of what constitutes an inspection, but experienced mechanics tend to have their own methodology. Pre-purchase inspections (commonly referred to as PPIs) are simply a mechanical review of a vehicle in advance of a sale.
Ready to outsmart the dealerships? Download your 100% freecar buying cheat sheets today. From negotiating a deal to leasing a car the smart way, it’s all available for instant download. Get your cheat sheets today!
One year ago, the auto market was in the depths of the new car shortage. Semiconductor chips were in short supply, and dealer markups were at their worst. In December 2022, the best year-end car deals are the best we’ve seen since 2020, when the average price paid for a new car was $38,000. Today, that figure is north of $48,000. Still, end-of-year deals present an opportunity for car buyers to get a deal at a time when rising interest rates are putting affordability out of reach for many.
Check out these other CarEdge resources, updated monthly:
Would a car buying coach make this whole process easier for you? CarEdge is changing car buying for the better. This is LONG overdue, isn’t it? Check out hundreds of free resources, or learn more about how CarEdge can help you negotiate a better deal today.
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The last six months of 2022 brought softening car prices after 18 months of gains. Used car prices are down 17% at the wholesale level, and retail prices are finally coming down. Will new car prices drop in 2023? Will we continue to see used car prices drop in 2023? Here’s what the data tells us.
Used Car Price Trends in 2023
Expect used car prices to continue a steady decline through at least the first half of 2023. For new cars, it’s a bit more complicated, as we explain below.
From March of 2021 through early 2022, used car prices climbed by over 50%. Just as used car prices began to soften in mid-2022, inflation soared through the roof, acting as a parachute for falling prices.
Used car prices have declined since mid-2022. Expect prices to continue dropping in 2023.
Still, no matter how you look at the data, used car prices have fallen over the past six months. Data from industry analysts at Black Book shows that retail used car prices have decreased consistently as demand decreased, mostly due to interest rate APRs shooting up dramatically. It now costs thousands of dollars more in interest to finance a car, especially for big borrowers with 72+ month loans.
Industry analysts at Manheim track used car prices. Used car prices are likely to continue falling into 2023.
In 2023, all signs point towards used car prices continuing to fall. If you’re wondering where all of these lower prices are, there’s a good reason for that. The most common metric used to track car prices is transaction price, or how much a buyer actually pays for the car. This is different from the sticker price. Dealers have been slow to drop sticker prices, but they’re much more willing to negotiate with buyers who put in the effort.
Why are cars more negotiable? Used cars aren’t selling as quickly, and rising interest rates mean that floorplanning costs are putting pressure on dealerships to sell soon, rather than hold on to inventory. Every day a car sits costs them money.
How Much Will Used Car Prices Drop?
Don’t expect used car prices to freefall in 2023, barring a severe economic downturn. Prices will in all likelihood continue to trend downward, becoming slightly more negotiable with each passing month.
Demand for affordable vehicles remains high, but unfortunately dealers are stuck trying to cover their losses. What losses, you ask? Thousands of car dealerships quite frankly paid too much for cars at wholesale auctions over the past year. Now that prices are falling, dealers are trying to squeeze every last dollar out of each deal. Therefore, we expect softening used car prices in 2023, but only moderate month-to-month price declines.
On CarEdge Car Search, we’ve been seeing used cars sitting on dealership lots for longer, and as floorplanning costs rise with interest rates, dealers are dropping prices.
Prices for this 2019 Ford Explorer have been dropping each month. This is commonplace across the market for mainstream models, but not for electric cars or some hybrids.
New Car Prices in 2023
Don’t expect MSRPs to go down
For mainstream models, dealer markups may become a thing of the past
You CAN negotiate new car prices in 2023
Inventory is climbing back, but will never return to ‘normal’
There’s less optimism on the new car front, but 2023 will still bring better prices to those who are patient and willing to negotiate.
In 2021, the chip shortage slammed automakers, and new car inventory was down to roughly one quarter of pre-pandemic norms. Now, new car inventory levels are increasing, slowly but steadily. Over the past year, new car inventory levels in the United States have risen from a low of about 900,000 cars per month to 1.6 million cars per month, and we expect to see inventory numbers increase closer to 2 million cars per month in the near future.
These numbers are still below historical norms, but automakers have increasingly made it clear that inventory will never be as high as it was back in 2019.
There’s a lot of pent-up demand for new cars, especially when it comes to hybrids and EVs. For most if not all of 2023, expect popular models to fly off the lot as quickly as automakers can produce them.
For other more mainstream models, it will once again be possible to negotiate new car prices below MSRP. In fact, our members are reporting more success with new car deals already. Check out some of their amazing success stories.
Incentives Remain Very Low
According to Kelley Blue Book, manufacturer incentives remain near all-time lows around 2% of the average transaction price. In late 2021, incentives averaged 4.3% of ATP. Go back to early 2020, and incentives averaged 11% of transaction prices. Wow!
Why are new car incentives going to remain low? Automakers have been forthright about their intentions to keep inventory low, even after supply chain challenges are put behind us. Without a glut of new cars waiting to be sold on dealer lots, there’s no reason to bring back big incentives. This post-pandemic strategy is a win for dealers and automakers, at the expense of vehicle affordability for buyers.
Electric Vehicle Prices in 2023
In November of 2022, the average transaction price for an electric vehicle in the U.S. was $64,249. That’s $16,000 more than the average price paid in the overall auto market. As you can see in the graph above, EV prices have remained parallel to the overall market for years. That could soon be changing, but not for reasons you’re likely to expect.
Automaker executives have recently said that price parity for their electric and combustion lineups is just a few years away. Are EVs going to get cheaper that quickly? A few new, lower-priced EVs are on the way, but that’s not the main factor that will likely turn their price predictions into reality.
What is? Take a look at where MSRPs are headed for all new cars, including those powered by internal combustion engines. CarEdge Auto Expert Justise Lasley says that signs point towards electric vehicle prices remaining high, but traditionally-powered models will continue to receive MSRP hikes, ultimately resulting in ‘price parity’.
Simply put, EV prices may have peaked (and on average may start to fall), but other cars will get more expensive, possibly even catching up to EVs.
However, there are a few affordable EVs we’re excited about. All of these will be available in late 2023.
2023 Fisker Ocean (2023 builds will be $60,000+ trims, but Fisker claims that they will start producing a $40,000 variant in 2024.)
Don’t forget about the original affordable EVs, despite their charging faults. The Chevy Bolt, Nissan LEAF, Kia Niro EV and Hyundai Kona EV are all worth a look if you can handle hour-long charge times.
If you’re thinking about going electric in 2023, you might find these resources helpful:
The Takeaway: Negotiate Car Prices, Don’t Pay Markups
Yes, you can expect car prices to drop in 2023, but in most cases, you’ll have to work for it. Dealers are holding out with higher prices, hoping that buyers who don’t keep up with the market will stumble into their showrooms.
Would a car buying coach make this whole process easier for you? CarEdge is changing car buying for the better. This is LONG overdue, isn’t it? Check out hundreds of free resources, or learn more about how CarEdge can help you negotiate a better deal today.
As we head into December 2022, new car inventory is the highest it has been in nearly two years. Finally, it seems that automakers are climbing out of the supply chain problems that brought the industry, and car buyers, to a halt for much of 2021 and 2022. Which car brands will have the best deals in December? Who will have the most inventory on the lot? We spoke to CarEdge Auto Experts Justise Lasley, Mario Rodriquez and Phil Nader to find out.
Be sure to check out these other CarEdge member favorites too (updated monthly):
The Lexus RX continues to be a great deal option with high allocations to dealers before the refreshed 2023 model arrives. It’s not just new 2022 Lexus models, either. CarEdge’s Mario Rodriguez said that low-mileage used Lexus models are priced very well right now.
“December is the best month for Lexus, which should bring some good incentives. Target end-of-year car sales for the most leverage at negotiating a Lexus deal.”
One of our CarEdge+ members just got a great deal on a Lexus UX 250h using CarEdge tools and the empowerment that comes with understanding your deal. Check that out here. We’d love to help you save thousands of dollars on your car purchase!
CarEdge’s Phil Nader highlighted Cadillac’s higher inventory numbers and overall luxury price trends. Luxury car brands have seen the largest price declines over the past six months. This is most obvious with used luxury car prices, but new luxury models are more negotiable than at any point earlier this year.
“Cadillac is seeing higher inventory levels and an average incentive of $2,600,” Phil said. “Expect to see pricing under MSRP on the CT4, CT5 and XT4, XT5 and XT6. Buyers should feel confident that prices can and should be negotiated to 5% below MSRP.”
However, General Motors CEO Mary Barra has indicated that GM will never return inventory to pre-pandemic levels, making GM leaner and more efficient. In other words, they won’t have as many reasons to discount prices if they intentionally keep inventory below historic norms.
The Mazda CX-9 and other models are available with good manufacturer incentives and dealer discounts. Mazda just dropped their lease financing to 0% APR, so leases are looking very attractive. For example, right now the following Mazda lease deals are advertised for these 2023 models:
Mazda3 Hatchback: $271/month for 30 months with $2,481 due at lease signing
Mazda CX-5: $315/month for 24 months with $3,314 due at lease signing
Mazda CX-9: $367/month for 24 months with $3,462 due at lease signing
Outgoing 2022 model-years have great financing offers right now. The 2022 CX-9 has 1.9% APR for 36 months with no payments for 90 days. Most other 2022 Mazda models have 2.49% APR right now too.
We expect even better Mazda deals in the second half of December.
One of our members successfully negotiated a great deal on a 2023 Mazda CX-5. The dealer was still pushing back, but as you can see here, Mazda dealers are motivated to sell, despite their determination to force junk fees.
Right now, our CarEdge Auto Experts are helping Nissan buyers with negotiable deals on the Nissan Altima, Rogue and Murano, especially in the mid-spec SV trim. Mario says that the best Nissan deals are in the Northeastern U.S., but good Nissan deals are becoming more common in the rest of America too.
These are the best Nissan offers this month:
2.19% APR for 36 months: Nissan Altima
2.69% APR for 36 months:
Nissan Versa
Nissan Sentra
Nissan Maxima
Nissan LEAF
Nissan Kicks
Our CarEdge+ member was even able to seal the deal on a Nissan Pathfinder Platinum at MSRP using CarEdge’s proven negotiation tactics. See our member’s amazing accomplishment here.
Note: The best Nissan deals may be short lived. Of the automakers on this list, Nissan faces the most severe ongoing inventory shortages. Nissan’s U.S. sales tumbled 31 percent in the first nine months of 2022. In November, further production cuts were announced. The Altima, Frontier and Titan will become harder to find in a month or two.
Luxury cars are negotiable today, and the prices will continue to drop in December. CarEdge members have successfully negotiated 7-10% off of MSRP on the Audi Q5 and Q7.
Sedans such as the A5 can be had at or near MSRP, as proven by CarEdge member Elan recently. We expect more negotiability in December as year-end car sales get underway.
Audi is offering finance deals right now, with most models available at 3.99% APR for 72 months. Most other automakers are limiting their competitive APR offers to no more than 48 months, so this is a rare opportunity.
BMW prices are negotiable as luxury prices soften.
Our Auto Experts are helping members negotiate 6-9% off MSRP for the BMW 3 and 5 series. The BMW X3 and X5 can be negotiated 6-9% off MSRP in some regions.
One of our members had a MASSIVE win with a BMW M340i xDrive recently. They negotiated $2,000 off of MSRP on one of the most difficult cars to find in the country right now. We’re confident this is a sign of even more negotiability to come with BMW and other luxury brands.
CarEdge Auto Expert Mario says that Alfa Romeo models are quickly becoming negotiable in late 2022. The Stelvio should be possible at 7-10% below MSRP. In fact, bringing the price below MSRP should be your expectation for at least the Stelvio in December.
What If the Dealer Won’t Budge?
At the very least, don’t pay over MSRP for the cars mentioned above. If your preferred dealer isn’t ready to negotiate pricing on these models, you should expand your search radius. I know it sounds ridiculous, but I myself saved $4,000 by purchasing my Hyundai IONIQ 5 a few hundred miles away from home. You likely won’t have to go that far.
We could see better deals from Ford, GM and Stellantis (notably Ram and Dodge) in December. Their inventory is higher now, and that’s a great sign for buyers.
Follow the CarEdge FREE resources blog for the latest car price updates! We hope to see you on the free CarEdge Community forum, where thousands of car buyers and owners come together to empower the consumer.
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