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Used Car Prices Are Crashing: Negotiate At Least 10% Off When Buying A Used Car in 2023
At CarEdge, empowering you is what drives us. Car buying, selling and ownership are too often accompanied by hassles and headaches. We do our best to save time & money with real advice from auto experts. Right now, the used car market is going through some big changes. In 2023, buyers have more leverage. For four months in a row, used car prices have declined at the wholesale level. Retail prices are softening, and we’re seeing more CarEdge members negotiate better and better deals.
If you’re in the market to buy a used car your goal should be to get 5-10% off of the dealer’s advertised price. Still, some brands are more negotiable than others. In this guide we’ll walk you through what has changed in the market, why you have leverage, and how you can get that 10% off.
Let’s dive in!
Smart Dealers See the Trend; Use This As Leverage
Data from Black Book reveals that days to turn, a metric used to measure how long cars sit on the lot before selling, is increasing. At the same time, there are more used cars for sale right now than at any other point of 2022. Supply is up.
Increasing dealer inventories, paired with higher interest rates, means that car dealers are paying more “floorplanning” cost than they have in years. Floorplanning is the interest payments car dealers make on their inventory. Just like you and me, car dealers typically finance the purchase of their inventory, which means that as inventory sits and interest rates rise, dealers have a financial incentive to negotiate and lower their prices to sell vehicles.
Dealers are once again working hard to sell cars. How do they do that? They lower their prices. Suddenly, with the softening of the market, more dealers are negotiating again, and many are starting to drop their used car prices rapidly. A quick look at CarEdge Car Search shows that more vehicles are seeing price drops. Take a look at this 2021 Chevrolet Equinox, for example. This dealer has discounted the price by 14% in ONE MONTH.
Over the past 35 days this dealer has dropped the advertised price by $3,500! That’s a 14% decrease in price in one month. Wow! As you can see, the most recent price declines are more significant. This is because the dealer is feeling the pressure of increased carrying costs, and a softening wholesale market (they can’t simply go to the auction and sell this car to make money like they could earlier in the year).
Use this information to your advantage! If you went to this dealership and requested an out the door price, be prepared to negotiate an additional 10% off of that amount. Why not? You already know the dealer is desperate to sell this car. Even if you end up with just 5% off, that’s still a win!
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The 5 Reasons Why Now Is A Better Time to Negotiate
When you go to negotiate a used car, know that these are the five reasons why they’ll be willing to negotiate with you. Feel free to even print this out and show them if they give you a hard time!
- Floorplan costs going up – We know that it is costing the dealer more money to hold onto their inventory than before.
- Demand is going down and cars are sitting on lots – Dealers who overpaid for used cars a few months ago are nervous because demand has softened. This, paired with increasing floorplan costs is a recipe for disaster for a car dealer.
- Dealers can’t sell their cars at the auction for a profit – Just a few months ago car dealers were selling used cars at dealer auctions for a profit. Now that option no longer exists. Wholesale prices have crashed, which means dealers are going to need to sell to retail customers, or take a HUGE hit at the auction.
- Retail prices are beginning to trend downward, albeit slightly – Car dealers had been holding out. Even while wholesale used car prices plummeted, car dealers were not lowering their advertised prices. Well, that trend has reversed, and we are finally starting to see a softening in retail asking prices.
- Dealers want to try and make a profit in the F&I office – Many car dealers are currently trying to sell used cars that they bought months ago for way too much money. Their best bet to breakeven on these deals is to take a loss on the front-end and to try and make it up on the back-end (finance and insurance). As long as you’re familiar with how to finance a car the right way, you should be able to get a better deal after all is said and done.
In fact, you can now finance with CarEdge to secure a low rate through our credit union partners. Not interested? You can still use your pre-approval as leverage to negotiate a lower APR at the dealership. Learn more about financing your car purchase with CarEdge!
Work With Smart Dealers
Some dealers just don’t look at the big picture and are oblivious to the car price trends we’re seeing right now. Not every car dealer understands that right now is the time to give up some of the profit they had planned to make on a vehicle in order to make a sale today before prices drop further in weeks to come. CarEdge Car Dealer Reviews and Markups.org are great places to learn what others have experienced at dealerships near you. Crowdsourcing car buying experiences is changing the game for the better!
Should I Buy New or Used Right Now?
With both new and used car prices still greatly inflated, it’s important to think about how today’s buying decisions could affect your future finances. New car prices are up 6% year-over-year, and 24% since July 2020. There’s no sign of new car prices coming down, and automakers seem to be announcing MSRP hikes weekly.
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If you’re determined to buy a new car, don’t expect MSRPs to go down at all. However, more buyers who work with CarEdge are able to buy at MSRP, with some even securing a deal under MSRP. Check out our latest success stories!
Work with dealers selling cars without markups. They’re not common, but they’re certainly out there. With MSRPs likely to increase in 2023, consider yourself a winner if you buy the new car you want with zero markups or dealer add-ons. Don’t forget, you can challenge dealer add-ons!
Better Times Ahead for Used Car Prices
On the other hand, used cars are more negotiable than at any point in time this year. If you’re looking for a better deal, here’s what you need to know: used car prices are declining at the retail level, but we expect price drops to continue for many weeks to come. There will be better deals in the weeks ahead.
While making long-term predictions is difficult right now, we’re confident that used car prices will be even more negotiable (with lower sticker prices) at the end of November than they are today.
If you are in the market for a used car right now, your goal should be to negotiate 5-10% off of the sticker price, or consider waiting a few more weeks (or longer) for the market to soften further.
Is It a Buyer’s Market?
Yes. As a buyer you have more leverage than at any point in the past 18 months. Does this mean used car prices are “good” or “fair”? No way. Used car prices rose 45% in 2021, so finding a true bargain is next to impossible. Used car prices remain inflated, but for those who need a vehicle, market conditions have improved, and are likely to continue to improve. Here’s what’s clear: you have more leverage today than at any other time in 2022.
Electric Car Prices Are Rising Faster Than ICE Cars
In 2019, market analysis and research firm Deloitte predicted that electric vehicles would reach price parity with combustion-powered counterparts in 2022. One year later, General Motors Chief Technology Officer Matt Tsien shared his optimism about EV prices. Cost parity between EVs and conventionally powered vehicles “will come sooner than many people think,” he said during a keynote speech at a Society of Automotive Analysts event. Skip forward to the second half of 2022, and EV prices are running away from ICE cars. The latest analysis from iSeeCars.com reveals just how much more expensive used EVs are, and recent MSRP hikes are driving new EV prices even higher.
Used Electric Car Prices Up 54.3% In One Year
Used car prices are dropping rapidly at the wholesale level, however buyers have yet to see any significant price drops at the retail level. Over the past eight weeks, used car prices have dropped nearly 5 percent at dealer auctions. Could the car price bubble be finally coming to an end? If you’re in the market for an electric vehicle or plug-in hybrid, we’re far from it.
According to data from iSeeCars, used electric car prices saw an increase of 54.3% from July of 2021 to July 2022. Over the same period, gas-powered cars were up just 10.1%. Number crunchers at iSeeCars analyzed the prices of over 13.8 million 1-5 year old used cars sold between January and July of 2021 and 2022 to determine the price growth of electric cars compared to ICE vehicles.
As gas prices reached new records this spring, the demand for EVs rose in parallel. However, a closer look at the data reveals that the few affordable electric cars on the market saw the greatest price increases, and by a long shot.
At a time when the average EV transaction price is over $66,000, the future of electric mobility is riding on the success of more affordable options. The number of sub-$40,000 EVs seems to be shrinking by the day.
Are Affordable EVs Going Extinct? It Appears So
iSeeCars found that America’s two most affordable electric cars saw prices increase the most. Used Chevrolet Bolt prices were up 29.3% since 2021, and used Nissan Leaf prices were up 45%. For the Leaf (which starts at $27,800 new), this massive price spike translates to an average sale price of $28,787 in July 2022. The average used Chevy Bolt sold for $28,291 last month. Considering the specs of the Bolt (notably charging capabilities), that’s a lot of money for a used EV.
With DC fast charging times typically around 45 minutes to one hour to add 200 miles of range, both of these electric models are likely to see drastic depreciation as much faster charging EVs become more commonplace. This is especially true for the Leaf, which lacks the decent range of the Bolt.
The Kia Niro EV seems to be the outlier here. With 239 miles of EPA-rated range and 77 kilowatt DC fast charging capability, it almost seems like a good deal with used Niro EV prices ‘only’ increasing 15.7% year-over-year. At the time of writing, used Kia Niro EVs are priced between $35,000 and $43,000.
Another Day, Another EV Price Hike
New electric vehicles are seeing price hikes, too. Just last week, Ford announced that the 2023 Mustang Mach-E was getting a massive price increase. The base Select trim now starts at $48,195 (up $3,200). The rear-wheel drive option was eliminated, effectively canceling the most affordable Mustang Mach-E. The most popular trim, the Premium AWD Mustang Mach-E, now starts at $56,175 before the $1,300 destination fee. That’s a $6,075 increase from earlier in 2022.
When Ford reopened F-150 Lightning orders in August, the news was accompanied by a $6,000 to $8,500 price increase. The most affordable F-150 Lightning now starts at $46,974. Most buyers will want the XLT with extended range, and that option now starts at $80,974. Will Ford lower the price by $1,000 to qualify for the new EV tax credit? We’ll find out soon enough.
Tesla prices are up over 20% since early 2021. The Model 3 is now 27% more expensive, and the most popular EV in America, the Model Y, now costs 30% more with a starting price of $65,990. Rivian made headlines when they canceled the most affordable configuration of the Rivian R1T electric truck. Anyone with basic math skills (or a calculator) can see that new and used EVs alike are becoming more expensive.
When Will EV Prices Go Down?
This right here is the question we’re all doing our best to answer. Still, it’s hard to tell. Here’s what needs to happen before EV prices will go down:
- EV production and inventory must increase
- For that to happen, supply chain constraints must ease
- Battery suppliers must continue to meet demand
- Automakers need to commit to affordable models rather than luxury EVs
- More EV competition may drive prices down
Is there any good news? It depends on which EVs you’re interested in, and your buying timeline. The new EV tax credit is the first to ever offer a used EV tax credit and future rebate, however strict eligibility requirements for both are causing an uproar. For some, buying an EV may soon be thousands of dollars cheaper. For others, federal EV incentives vanished when President Biden signed the Inflation Reduction Act of 2022 into law. See which new EVs and used EVs qualify for the revised incentives.
Want to stay informed about the latest EV pricing, ownership and development news? Join the CarEdge Community for free. Our Electric Vehicle forum is the place to be for EV discussion, advice and expert consultation!
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Factory Ordering a Car? These Are Wait Times We’re Seeing in 2025
We track new car inventory monthly, and it’s been encouraging to see automakers like Ford and Toyota having more cars shipped to dealers. Still, automakers are selling every car they can make. With that said, more drivers are placing factory orders for vehicle builds that might not arrive until well into next year, or worse. Here’s how long car buyers are waiting for the vehicle they want. We want to send a special thank you to CarEdge Coach Mario for sharing this update with our audience!
Important note: These times are strictly for factory ordered cars. Many of these models are now available on dealer lots.
Kia and Hyundai Wait Times
Hyundai Motors owns 51% of Kia, and the two Korean automakers have grown increasingly close over the past decade. Today, many of their vehicles share components, and therefore have been similarly impacted by supply chain constraints.
These are the factory order wait times our team of Car Coaches is hearing in 2025:
- Kia Telluride – 2 to 3 months
- IONIQ 5 – 3 months for factory orders
- Elantra (some trims) – 2 to 4 months
- Kia Sportage – 2 to 3 months
Subaru Wait Times
Right now, buyers placing orders for a Subaru are regularly being told that the wait time for delivery will be between one and four months, and in some cases longer. Subaru was hit hard by the chip shortage, and has yet to pull out of the slump.
In general, 2-3 months wait can be expected for any custom-ordered Subaru in 2025. Here are some additional details from what CarEdge Coaches are seeing:
- Ascent: 1-4 months
- Crosstrek: 1-3 months
- Forester: 1-2 months
- Impreza: 1-3 months
- Legacy: 1-3 months
Toyota Factory Order Wait Times
How long you should expect to wait depends on the Toyota model and spec that you want. For Toyota deliveries, you’ll be looking for an available allocation rather than a custom order. For Toyota hybrids and plug-in hybrids, wait times are generally much longer.
In 2025, most Toyota models no longer have long waitlists for an available allocation, with the exceptions being the Prius, GR86, GR Corolla, Grand Highlander Hybrid, Land Cruiser, Sienna, Supra M/T and Spec Edition TRD Pro. For these models, you can expect to wait 3-4 months for an allocation that’s not already spoken for.
It is worth noting that more Toyota hybrid models may start seeing longer wait times as demand increases during summer buying season.
Honda Wait Times
On average, Honda factory orders (or allocations) placed today can expect a short wait before delivery, generally less than two months. The only remaining Honda models with inventory constraints are the Civic Si and Civic Type R.
Otherwise, these are the Honda factory order wait times we’re seeing in 2025:
Accord: Immediate
Civic: 1-2 months
CR-V: 1-2 months
CR-V Hybrid: 2-3 months
Odyssey: 1-2 months
Pilot: 1-2 months
Ridgeline: Immediate
Ram and Jeep Wait Times
For Jeep and Ram factory orders, wait times depend on what model and trim you want. Don’t forget that these two brands have the highest new car inventory in the industry right now, so lot inventory is especially negotiable. Don’t expect the same negotiability with Ram and Jeep factory orders.
These are the Ram truck factory wait times our team is encountering in 2025:
Ram 1500: 2-3 months
Ram Super Duty: 3-5 months
Jeep factory orders: 8 – 10 weeks
Ford Factory Orders Wait Times Faring Slightly Better
These are the Ford factory order wait times we’re seeing this year:
Bronco: 6-9 months
Ford F-150: 5-6 month wait time for higher trims (King Ranch, Tremor, Platinum), less than 3 months on XL, XLT and Lariat
F-250: 2-3 months
F-350: 2-3 months
Mustang: 3 months
Tesla Wait Times
Tesla regularly updates wait times for the Model Y, Model 3, Model S and Model X. As of 2025, here are Tesla wait times as shared on Tesla.com. Note that there are many possible configurations that affect estimated delivery dates, so check Tesla’s configurator for the most accurate estimate.
- Model 3 RWD with Aero wheels: Less than 1 month
- Model 3 RWD with Sport wheels: Less than 1 month
- Model 3 Long Range AWD with Sport wheels: Less than 1 month
- Model Y Long Range with Gemini wheels: 1-3 months
- Model Y Long Range with Induction wheels: 1-3 months
- Model S Dual-Motor with Arachnid wheels: Less than 1 month
- Model X Dual-Motor with Cyberstream wheels: 1-3 months
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New Car Prices Hit A NEW Record; Monthly Payments Now Average $733
Another month, another new record for car prices. In July, new car prices climbed 0.3% higher, and the average monthly payment increased by 0.9%. Used car prices have decreased at the wholesale level for eight weeks, but new car prices remain at record highs as dealer inventory stays slim. Here’s the latest new car price data from Cox Automotive, what it means for new car prices in August, and our best guess as to when new car prices may finally start to come down.
The Average New Vehicle Transaction Approaches $50,000
The average transaction price (ATP) for a new vehicle increased by 0.3% in July to a new record of $48,182, according to the latest Kelley Blue Book transaction price report. Year-over-year vehicle price increases are astounding. Since July 2021, the average new vehicle transaction has increased 11.9%, or $5,126. Looking back two years to the heart of the pandemic slump, the average new car transaction price is up 21.5% since July 2020. Worse yet, the ATP is up 58% over a decade. In 2012, the average transaction price was near $30,000.
Why are new car prices still going up? Rather than the prices themselves increasing substantially in July, other factors are largely responsible for the new record. The average interest rate increased another 19 basis points last month. The average auto loan interest rates across all credit profiles are 3.86% for new cars and 8.21% for used cars, according to data from MarketWatch. Gone are the days of zero percent interest rates, and the Federal Reserve will likely hike rates higher to get a handle on inflation.
Another factor contributing to record high average transaction prices is the popularity of luxury vehicles. Luxury vehicle share remains historically high, pushing the average ATP higher. The post-pandemic ‘K-shaped recovery’ has resulted in divergent economic situations from one household to the next. One family might be struggling to make ends meet, while the other is more well off than ever before. This trend has contributed to a surprisingly healthy luxury vehicle market, and more consumers willing to pay a premium for a new car in 2022.
Monthly Payments Surpass Rent For Many
The average monthly payment for a new car is now $733/month. That’s a new record, and it’s just a hair above June’s previous record of $730. Nationally, median one-bedroom rent is now $1,450, which is 11% higher than a year prior. In several Midwestern and Southern states, the average car payment is now on par with rent. We’ve never seen this before.
Cox Automotive’s Vehicle Affordability Index really puts this in perspective. The Vehicle Affordability Index is driven by the consumer’s vehicle transaction prices, the income of the consumer, amount financed by the consumer, and the interest rate provided by the lender. The result is a value that represents the number of weeks of the median household income in America that would be needed to buy the average new vehicle.
The number of median weeks of income needed to purchase the average new vehicle in July increased to 42.2 weeks from a downwardly revised 42.0 weeks in June. In other words, the average new vehicle purchase costs as much as 42 weeks of median income in America. Financial advisors generally recommend keeping total car expenses below 20% of monthly income, but very few Americans are able to do that today. With an average monthly car payment of $733, monthly income would need to be AT LEAST $3,665 to achieve this.
New-vehicle affordability in July was much worse than a year ago when prices were lower, incentives were higher, and rates were much lower. The estimated number of weeks of median income needed to purchase the average new vehicle in July was up 15% from last year. One year ago, auto interest rates were near record lows, incentives still existed, and prices were 11.9% lower.
New Car Inventory Improves, But Only Slightly
In July, some automakers had improved inventory. Some, such as Ford and Toyota, had the greatest increases in inventory in several months. Still, with order backlogs and demand far exceeding supply, dealer lots remained nearly empty, and car prices remained high.
See the latest new car inventory numbers here.
New Car Prices Will Stay High For the Remainder of 2022
New car prices will fall once automakers are able to produce more vehicles. What needs to happen for vehicle production to increase? Supply chain disruptions must come to an end once and for all. We’ve been watching automakers ration their supplies of semiconductor chips, wire harnesses, and even electric vehicle batteries as the pandemic and the war in Ukraine continue to disrupt supply chains.
There is now a question as to whether automakers will ever go back to their old ways of over producing vehicles and discounting them well below MSRP. They now see that consumers are willing to pay higher prices for cars, and that’s good for their bottom lines. As long as people agree to pay marked up prices, there will be no incentive to bring prices back down to historical norms. Many in the industry see this as the only path forward, given today’s market conditions.
A Used Car Might Be the Better Value in 2022
There is a bit of a silver lining. For eight weeks in a row, we’ve been tracking steepening declines in wholesale used car prices. We can confidently say that a trend has emerged. At auction, used car prices have dropped about 4% in two months. We expect these declines to soon translate to retail used car prices, and at the very least, dealers will be willing to negotiate a deal. Based on past trends, we expect retail used car prices to begin to decline in September. Don’t hold your breath, a used car might be the better value in 2022.
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Which Used EVs and PHEVs Qualify for the Used EV Tax Credit?
After years of asking for a used electric vehicle tax credit, we finally have it. Unfortunately, it’s not all that we had hoped it would be. Income limits are strict, and vehicle price caps are even tighter. We analyzed price data to find every EV and plug-in hybrid that may qualify for the used EV tax credit. One takeaway: It’s hard to find a sub-$25,000 electric vehicle!
As far as we can tell from the language of the Inflation Reduction Act, the strict Made-in-America and battery sourcing requirements that apply to new EVs and PHEVs do not apply to used EVs. However, the bill allows for the Treasury Secretary to finalize rules by the end of 2022, so it’s not set in stone just yet.
The Used EV Tax Credit: A New Incentive With Strict Requirements
Beginning on January 1, 2023, car buyers can claim a $4,000 tax credit when purchasing a used electric vehicle for under $25,000. For buyers purchasing an EV under $13,300, this incentive is capped at 30% of the vehicle’s price. The seller must be a qualified dealer, and the buyer must have an adjusted gross income (AGI) of under $75,000 (individual), $112,500 (head of household) or $150,000 (joint filers).
Just how many used EVs can be easily found for under $25,000? A quick look at used EV prices is a reality check. If you’re open to settling for an electric vehicle model with lower range, slower charging and more miles on the odometer, you might find a deal that qualifies.
Used EVs Under $25,000
Nissan Leaf (2011-2018)
Range:
2011-2015 models – 73 to 84 miles
2016-2017 models – 84 to 107 miles
2018-2022 models – 150 to 226 miles
Max charging speed:
50 to 100 kW (charge to 80% in 45 minutes)
See used Nissan Leaf listings.
Chevrolet Bolt (2017-2019)
Range: 238 miles
Max charging speed:
55 kW (charging to 80% in just under an hour)
See used Chevrolet Bolt listings.
Chevrolet Spark
Range: 82 miles
Max charging speed:
50 kW
See used Chevrolet Spark EV listings.
BMW i3 (2014-2017)
Range: 81 miles to 188 miles, depending on model year and trim
Max charging speed: 40 kW (charge to 80% in 20 minutes)
Hyundai Kona Electric (2019)
Range: 258 miles
Max charging speed: 75 kW (charge to 80% in 50 minutes)
See used Hyundai Kona EV listings.
Kia Niro Electric (2019)
Range: 258 miles
Max charging speed: 75 kW (charge to 80% in 50 minutes)
See used Kia Niro EV listings.
Kia Soul Electric (2019)
Range: 111 miles
Max charging speed: 75 kW (charge to 80% in 50 minutes)
See used Kia Soul EV listings.
2015-19 Fiat 500e EV
Range: 84 miles
Max charging speed: 85 kW
2016 VW e-Golf EV
Range: 83 miles
Max charging speed: 7.2 kW
See used Volkswagen e-Golf listings.
Used PHEVs Under $25,000
The used (and new) EV tax credit does make plug-in hybrids (PHEVs) eligible, as long as they have a battery capacity of at least 7 kilowatt-hours. CarEdge’s auto expert Mario Rodriguez analyzed used PHEV prices, and these are the PHEV models that have a shot at qualifying under the $25,000 price cap.
2016 -18 Audi A3 Sportback e-tron PHEV
2014-17 BMW i3 EV
2011-17 Chevrolet Volt
2013-17 Ford C-Max Energi PHEV
2013-20 Ford Fusion Energi PHEV
2018 Honda Clarity PHEV
2019 Hyundai IONIQ PHEV
2016-17 Hyundai Sonata PHEV
2017-18 Kia Optima PHEV
2018 Mitsubishi Outlander PHEV
2017 Toyota Prius Prime
Used Car Prices Are Beginning to Drop, What About EVs?
The latest data shows wholesale used car prices dropping, but that has yet to translate to lower retail prices. Electric vehicles and plug-in hybrids are likely to be the last to see price declines, as they remain in high demand. We’ll keep you updated with the latest info.
Keep track of EV market share as more Americans go electric.
