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In our recent CarEdge Negative Equity Report, we uncovered an alarming trend: 31% of those who financed their vehicles are currently underwater on their loans. In other words, they owe more on their cars than the vehicles are worth. Among electric vehicle owners, the rate of negative equity is even higher—46% of EV drivers are upside down on their loans. Two brands stood out with particularly high rates of negative equity: Tesla and BMW. Here’s a look at just how bad the situation is for owners of these two luxury car brands.
Half of Tesla and BMW Drivers Are Underwater
The CarEdge Q3 2024 Negative Equity Report revealed that 52% of Tesla owners and 50% of BMW owners are underwater on their car loans in 2024. This is significantly worse than the industry average. Tesla owners had a median equity of -$1,718, the lowest of all car brands analyzed. In fact, Tesla was the only brand with a negative median equity. BMW drivers didn’t fare much better, with a median equity of just $421, ranking second worst among 16 brands.
How did we get here?
In 2023, Tesla slashed prices across its lineup by an average of 25%. For example, Tesla’s best-selling Long Range AWD Model Y now starts at $47,990, a drastic drop from $65,990 in late 2022. These sharp price cuts sent resale values plummeting, driving up negative equity among Tesla owners.
For BMW, the situation is less straightforward. While BMW retains about 63% of its value after three years—above average for a luxury brand—higher financing APRs have slowed equity growth. Coupled with falling resale values, BMW owners are struggling to stay above water.
A Recipe For Negative Equity: Tesla and BMW Drivers Take Out Longer Loans
Our Negative Equity Study also highlighted the impact of loan terms on negative equity. Drivers with shorter loan terms of 48 months had a median equity of $9,762, while those with 60-month loans saw a median equity of $7,041. However, longer loans of 72 or 84 months had a devastating effect on equity. Those with 72-month loans had a median equity of just $2,085, while 84-month loans left drivers with a median negative equity of -$4,920.
Tesla and BMW owners are particularly prone to longer loans. Tesla drivers had an average loan term of 66 months, with 65% of respondents having 72-month loans or longer. BMW drivers averaged 63 months, with 43% of them financing for 72 months or more. These extended loan terms put drivers at a higher risk of negative equity, especially when combined with the rapid depreciation often seen with luxury and electric vehicles.
To avoid negative equity, drivers should consider sticking to loan terms of 60 months or less and making larger down payments whenever possible. Choosing vehicles with strong resale value can also help maintain equity throughout the life of the loan. For example, models like the Toyota Prius have consistently performed well in resale value rankings, while others like the Tesla Model X perform poorly.
Another effective strategy to combat negative equity is simply keeping your vehicle longer. Drivers who frequently trade in cars are much more likely to be upside down on their loans, as depreciation outpaces the payoff of their existing loans.
Compare vehicle depreciation, maintenance costs, and more with the 100% free CarEdge Research Hub. It’s insider data, for everyone!
As we approach the end of 2024, now is the time to score big deals on new SUVs. Many dealerships have excess inventory, especially leftover 2023 models, making these vehicles ripe for negotiation. Here are the five most negotiable SUVs for year-end shoppers in 2024.
The Jeep Grand Wagoneer tops the list with a 275-day supply (193% above the market average). There are 2,587 Grand Wagoneers currently for sale, and 23% of them are 2023 models. That’s the most of any mainstream model on sale today. As Jeep’s most expensive vehicle ever, with an average price of $102,479, the pressure is on dealerships to clear out old stock. Right now, Jeep buyers can take advantage of 0% APR for 36 months or 3.9% APR for 72 months. We expect these Jeep deals to get even better in the final weeks of 2024.
The Ford Escape is next on the list with a 160-day supply and some serious manufacturer incentives. In late October, there are 52,832 Escapes for sale nationwide, including 1,000 leftover 2023 models. Ford is offering attractive incentives, such as 1.9% APR for 60 months plus a $4,000 trade assist. Additionally, you can sign an Escape lease deal for $279 per month for 36 months with $2,429 due at signing.
The Dodge Durango has a 152-day supply (62% above average), with 15,801 units on sale, including over 700 remaining 2023 models. Despite its high average price of $53,800, Dodge is offering up to $5,950 in cash discounts, making it a highly negotiable SUV this year-end sale season. Right now, you can lease a Durango for $379 per month for 36 months with $4,199 due at signing.
The Kia Sorento has a 134-day supply (43% above average), and there are 31,176 Sorentos available. Kia is offering 0% APR for 48 months or a Sorento lease deal of $269 per month for 24 months with $3,999 due at signing. The Sorento received a big facelift for 2024, but remains a slow seller. SUV shoppers should use this to their advantage.
Rounding out the list is the Nissan Pathfinder, with a 114-day supply (21% above average) and 19,187 Pathfinders still on sale. Nissan is offering attractive incentives, including 0% APR for 36 months plus a $1,500 cash discount. If you’re looking for a negotiable SUV, the Pathfinder is worth a test drive.
Thousands of SUVs Are On Clearance
Time flies, and 2024 is already nearing its end. As 2025 approaches, dealerships are eager to clear out their remaining inventory, particularly leftover 2023 models. If you’re in the market for a new SUV, now is the time to negotiate—aim for up to 25% off the original MSRP on remaining 2023 models, and at least 10% off of remaining 2024s with high inventory.
Ready to master the art of negotiating a car deal with confidence?Sign up for Deal School, our 100% free, self-paced online course taught by CarEdge Co-Founder Ray Shefska.
As 2024 winds down, car buyers have a golden opportunity to secure deep discounts on these sedans. With high market day supply, slow sales, and even remaining 2023 models, these are the most negotiable cars for year-end shoppers.
With a market day supply of 269 days—186% above the national average—the Hyundai IONIQ 6 tops the list of most negotiable cars for 2024. As of late October, 6,339 units remain on sale, including 389 new 2023s still sitting on dealer lots. In the weeks ahead, buyers should aim for significant discounts given the IONIQ 6’s oversupply.
Right now, Hyundai is offering 0% APR for 48 months and up to $7,500 in cash savings. For fans of leasing, Hyundai is offering an IONIQ 6 lease deal of just $199 per month for 24 months with $3,999 due at signing.
The luxury Alfa Romeo Giulia is next on the list, with a 210-day supply of inventory—123% higher than the national average. This translates to 1,006 cars sitting unsold at dealerships, providing plenty of opportunities for negotiation. Alfa Romeo has plenty of unsold 2023s models awaiting buyers, as do all Stellantis brands.
The Giulia comes with strong leasing offers this month, including a lease of $499 per month for 42 months with $5,900 due at signing.
Considering the abundance of inventory and ongoing year-end sales, Alfa Romeo is motivated to clear out these remaining 2024 models, making this an excellent time to strike a deal on this premium sedan.
Affordable yet slow-selling, the Mazda 3 sedan presents an attractive option for bargain hunters. With a market day supply of 132 days, Mazda 3 inventory is 40% above average, with over 11,000 units on sale. The average selling price for a new Mazda 3 is $28,702, or about $20,000 below today’s average new car price. Better yet, the 3 maintains an above-average resale value.
This month, Mazda is offering both financing and lease deals to move inventory off the lot. Financing deals include 0% APR for 36 months plus $500 in cash savings. For those looking to lease, Mazda’s lease offer of $239 per month for 33 months with $4,419 due at signing is another solid option. With its affordable price tag and plenty of inventory, buyers have great leverage for negotiation on this reliable sedan.
The Hyundai Sonata has a 121-day supply with 13,340 units waiting to be sold. With an average selling price of $30,732, year-end buyers can expect excellent incentives to help Hyundai move this oversupply before the new year.
In October, Hyundai’s current promotion includes financing offers as low as 2.99% APR for 60 months or a Sonata lease offer of $229 per month for 36 months with $3,499 due at signing. If you’re looking for a practical sedan with great features, the Sonata is positioned to be a strong year-end deal for 2024.
Finally, the Nissan Altima rounds out the list with a market day supply of 119 days. Saying that there’s an oversupply of Altimas would be an understatement. Today, there are 18,292 units for sale in America.
The Altima’s declining sales over the past decade have forced Nissan to offer generous discounts, making this a great choice for year-end buyers eager to negotiate a deal. In fact, Nissan is already offering zero percent financing for 36 months plus $1,000 in cash savings. For those who prefer a lease, Nissan is offering an Altima lease deal for $269 per month with $3,209 due at signing.
As 2024 comes to a close, car buyers should focus on negotiating great deals on these highly negotiable models. With oversupply and slow sales, it’s entirely possible to secure 15% or more off the original MSRP on these sedans, especially as dealerships are eager to clear inventory before year-end.
Ready to master the art of negotiating a car deal with confidence? Sign up for Deal School, our 100% free, self-paced online course taught by CarEdge Co-Founder Ray Shefska!
2024’s year-end car deals are set to be some of the best in years. Starting with Black Friday and continuing through December, the best time to buy a car is here. With a surplus of inventory, falling interest rates, and holiday sales, dealers and OEMs are motivated to sell. If you’re in the market for a new car, this is the time to pay attention.
Interest rates are expected to gradually decline in late 2024 after hitting a peak earlier in the year. As rates soften, automakers will be offering low APR deals and special financing options to lure buyers who have held off due to high borrowing costs. This means dealerships will be motivated to offer better terms to close sales by the end of the year. This will especially benefit car buyers looking to finance at lower rates.
In 2024, the auto industry is facing a glut of unsold vehicles. Improving supply chains, rising interest rates, and fewer buyers are creating a buyer’s market. Dealerships are sitting on excess inventory that they need to clear out to make space for 2025 models. As year-end car deals approach, buyers will see more competitive pricing and deeper discounts.
Slowing Car Sales Bring Big Manufacturer Incentives
Several automakers are struggling with declining sales in the U.S. market, which will likely trigger bigger incentives for buyers during year-end promotions. For example, Stellantis reported a 20% drop in Q3 2024 U.S. sales, leaving a large inventory to clear by year’s end.
Nissan, with an oversupply of Rogues, Frontiers, and Pathfinders on dealer lots, is already ramping up its discounts. Even Ford has seen flat sales, suggesting that more aggressive offers will be needed to boost year-end purchases. Expect major automakers to offer compelling financing options, cash discounts, and attractive lease deals on their remaining 2024 models.
Holiday Season Always Means Car Sales
Each year, the holiday season kicks off some of the best car deals, as both manufacturers and dealers know that consumers are more inclined to make big purchases. December is traditionally a month of heavy promotions, and after years of holiday sales conditioning, buyers often wait for year-end sales. As dealerships try to hit their annual sales targets, holiday incentives mean larger savings for shoppers who know where the deals are.
Some Car Buyers Shouldn’t Wait
While the biggest deals usually arrive in late December, 2024’s current zero-percent APR offers and low-payment lease deals make waiting unnecessary for some buyers. If you spot a deal now that fits your needs and budget, locking it in today could be a smart move. With interest rates stabilizing, locking in a great finance offer now might beat the crowds rushing for year-end car sales.
In summary, 2024’s year-end car deals are expected to be huge. Automakers are pushing to clear high inventory levels as 2025 models rush in, and dealerships are feeling pressure to meet their sales targets. The combination of falling interest rates, manufacturer incentives, holiday promotions, and excess stock makes this December a golden opportunity for car buyers. If you find the perfect deal now, don’t hesitate—but if you can wait, December’s deals could save you even more.
When consumers buy hybrid or electric cars, they typically do so with a greater purpose. Either they wish to help the planet by limiting the burning of fossil fuels and reducing emissions, or they want to save money at the pump. Many would consider themselves early adopters of new technologies, always eager to try the latest tech. But are hybrids and EVs better for your wallet? Considering resale value, are they a risky purchase? We will take a look at how hybrids and electric vehicles perform when it comes to the latest depreciation numbers.
CarEdge has calculated the annual depreciation of popular car models on sale in the United States. This free data available on the CarEdge Research Hub is extremely valuable for car shoppers. With these insights, it’s possible to determine which cars have historically been relatively good investments, and which ones have been underperformers.
Let’s start with the bad news for electric vehicle owners: some models are performing poorly in terms of value retention. Topping the list is the Tesla Model X, which retains just 43.15% of its value after five years, meaning it depreciates by 57%. The Tesla Model S follows closely with a 5-year residual value of 43.49%. Similarly, the Nissan LEAF depreciates by more than half, with a 5-year residual value of just 45.56%. These EVs, despite their fuel efficiency, lose significant value over time, outpacing any potential fuel savings.
The Better Performers
On the other end of the spectrum, some hybrids and electrics hold their value exceptionally well. Leading the pack is the Toyota Prius, with a remarkable 5-year residual value of 68.92%, making it one of the best vehicles for resale, hybrid or otherwise. The 2025 Toyota Camry, now exclusively available as a hybrid, also shines with a 5-year residual value of 65.09%. Both models offer exceptional fuel efficiency and long-term financial value, making them solid investments for those who prioritize fuel savings and resale value.
What About Tesla?
No article about hybrids or electric cars would be complete without a commentary on Tesla. With such, we will tell you that the Tesla Model S – the only Tesla qualifying for 5-year results – ranks 75th overall among luxury cars. The Model S, which cost roughly $90,000 when purchased in 2019, is today worth 43% of it’s value as new, being worth about $40,000 in 2024. Losing $50,000 of value is never fun, but that was the cost of being an early-adopter five years ago. Our take is that Tesla deserves credit for producing a fully-electric car, and still having it be worth something meaningful with its technology 5 years old, and after you’ve put some significant miles on it.
The Bottom Line
Our take on whether hybrids and electric cars offer good resale value can be summed up with a classic “it depends.” Some models, like the Toyota Prius and Camry Hybrid, have proven to retain their value remarkably well, making them smart investments when paired with fuel savings. On the other hand, vehicles like the Nissan LEAF and Tesla Model X suffer significant depreciation over time, despite their tech-savvy appeal. The smart car shopper will always do their homework, assess depreciation trends, and choose wisely to maximize value retention over time.
CarEdge Insights
