Is It Better to Buy New or Used in 2023? Here’s What the Data Says

Is It Better to Buy New or Used in 2023? Here’s What the Data Says

In 2023, the automotive market continues to navigate the unpredictable seas of supply and demand. A lingering used car shortage from previous years is causing 2-3-year-old in-demand models to skyrocket in price, while new car inventories are bloating due to overproduction. What does this mean for you, the savvy car shopper? Let’s dive in.

New and Used Car Inventories Are Headed in Opposite Directions

used vehicle inventory - Cox Automotive

The latest data from Cox Automotive shows that in many cases, there’s a shortage of 2-3 year old used cars. For in-demand models that are just a few years old, demand far exceeds supply. Dealers are using this to their advantage (to the surprise of no one…) and are marking them up severely. For the brands we’ll talk about below, 2-3 year-old used cars often cost nearly the same as a brand-new car. There’s a totally opposite situation for NEW cars. For many makes and models, there’s now an oversupply of new cars in 2023, just two years after the car shortages of 2021.

new vehicle inventory - Cox Automotive

New car available supply (total vehicles on the lot) is up 71% since last year, and dealerships are finding their lots chock-full of shiny new cars.

In terms of days’ supply, today’s market is up 47% since spring 2022. Days’ supply is a common auto industry metric that is calculated by dividing the total number of available vehicles by the average daily sales number from the last 45 days. It’s one of many available insights for every new and used listing with CarEdge Data.

790,000 more vehicles on sale today compared to May 2022 means dealers are more motivated than ever to cut deals and move inventory. However, despite this surge in supply, the average listing price for a new car is still 5% higher than last year.

On the flip side, used car inventory is 13% lower compared to last year. High prices have led buyers to say NO to used cars, resulting in a 4% drop in sales rates and listing prices. However, these prices remain stubbornly above 2021 levels.

New Car Inventory By Brand

Honda new car inventory in 2023

With brands like Toyota, Lexus, Kia, Honda, Subaru, Hyundai, BMW, and Land Rover, new car supply shortages are making used models a more attractive option than their new counterparts. How so? Dealers continue to markup these cars in many markets.

On the other hand, brands like Ford, Lincoln, Dodge, Ram, Chrysler, Jeep, and Buick are dealing with a glut of new cars, making new vehicles especially negotiable today, and offering more value than used inventory at nearly the same price AFTER negotiation.

Based on the latest new car inventory, these brands are most negotiable in 2023:

  • Buick
  • Jaguar
  • Jeep
  • Chrysler
  • Infiniti
  • Ram
  • Lincoln
  • Ford
  • MINI
  • Mitsubishi
  • Genesis
  • Acura
  • Audi
  • GMC

Nationally, these automakers all have current new car inventory well above the historical norm of 60 days’ supply. See local days’ supply for models you’re interested in with CarEdge Data on Car Search.

Using the tools available through CarEdge Data, we analyzed new car inventory by brand in the three largest markets across the nation. Some notable differences are seen across California, Texas, and Florida.

BrandDays' Supply (CA)Days' Supply (TX)Days' Supply (FL)
Toyota394338
Kia444641
Honda464743
Lexus455045
BMW536757
Land Rover706564
Subaru595355
Hyundai665356
Volkswagen636356
Cadillac605763
Chevrolet686468
Nissan655954
Mercedes736869
Porsche826172
Mazda626868
GMC777273
Audi897262
Acura728160
Genesis969587
Mitsubishi916565
Mini819492
Ford807167
Dodge1018492
Lincoln1047272
Ram147116132
Infiniti948873
Chrysler1068687
Jeep126103119
Jaguar1019081
Buick10010684

Hyundai, Nissan, Mitsubishi and Audi have much higher inventory on the West Coast, while Toyota, Kia and Honda have higher new car inventory in Texas. Be sure to check local market supply in your area to get the best sense of negotiability.

New Car Inventory By Segment

new and used car inventory - Cox Automotive

In terms of segments, compact cars, midsize cars, subcompact cars, compact crossover/SUVs, minivans, and full-size crossover/SUVs are experiencing a supply shortage

Conversely, full-size pickup trucks, high-end luxury cars, electric vehicles, full-size cars, and uber luxury vehicles are enjoying a much higher days’ supply than average.

New car segments like vans, mid-size SUVs, most luxury cars and traditional hybrids have roughly average inventory right now.

It’s a Great Time to Go Electric

Right now is a great time to be in the market for a new EV. Across all brands, there’s a nearly 90-day supply of new electric vehicles. This can be seen in models such as the Ford Mustang Mach-E, which now has over 150 days’ supply. That’s up over 100% since last year.

Tesla keeps lowering prices, and with the Model Y, has severely undercut prices for the following popular competitors:

  • Hyundai IONIQ 5
  • Kia EV6
  • Genesis GV60
  • Audi Q4 e-tron
  • Nissan Ariya
  • Ford Mustang Mach-E

In other words, there’s finally serious competition in the EV landscape. Is it a price war? So far, Tesla’s competitors have not fired back with steep price cuts of their own. We’ll see if that changes this summer. However, used Tesla prices have fallen drastically this year.

Remember, the EV tax credit landscape has changed in the past several months. Popular EVs from Hyundai, Kia, Audi and others no longer qualify due to made-in-America requirements. However the most popular electric vehicles in America, which are of course those bearing the Tesla badge, once again do qualify for the first time since 2019. Here’s an updated summary of where things stand with the EV tax credits.

New Cars Are Looking Better Than They Have in a While

Whether it’s better to buy new or used in 2023 largely depends on the brand and type of car you’re interested in. Industry-wide, new cars are looking better than they have in years. Popular brands are facing an oversupply, and with that comes greater negotiation power. 

With fluctuating inventories and prices, it’s crucial to stay informed and flexible. Use CarEdge Car Search to check the local days’ supply of the makes and models you’re interested in, and make sure to stay updated with the latest market trends to snag the best deal.

Whatever your choice, remember that data is your best friend when navigating the complex landscape of car buying. Your team of CarEdge Car Coaches is here to help! Happy car shopping!

How to Finance a Car Like a Pro: The Ultimate Auto Financing Cheat Sheet

How to Finance a Car Like a Pro: The Ultimate Auto Financing Cheat Sheet

Purchasing a new or used car can be an exciting experience. It can also be miserable. When you set out to secure a great deal on your next car, it’s essential to be well-informed about the auto financing process to avoid costly mistakes. To help you navigate the often complex world of car loans and financing, we have compiled a comprehensive guide to auto financing that covers ten essential steps and tips for success, including:

1. Knowing your credit score

2. Considering down payment options

3. Shopping around for financing

4. Determining the right loan term

5. Understanding manufacturer incentives

6. Exploring Certified Pre-Owned Vehicles

7. Avoiding finance markups

To illustrate how to effectively employ these strategies, we have also created an example conversation between an empowered car buyer and a car dealership Finance Manager. This detailed script guides you through the entire financing process, from the initial introduction to signing the paperwork. By following this example and implementing the advice provided, you’ll be better equipped to secure a favorable loan, save money, and drive away in the car of your dreams.

Part One: Knowledge

Your Path to Auto Loan Savings: Credit Scores, Down Payments, and Savvy Financing Strategies

Let’s dive into valuable tips and expert advice from myself, CarEdge Finance and Insurance Specialist Kimberly Kline, and automotive industry veteran and CarEdge co-founder Ray Shefska. We’ll explore the key factors that influence your loan costs, such as credit score, down payment, and loan term, as well as some lesser known considerations that can save you big bucks at the finance office. Study this auto finance cheat sheet before you head to the dealership!

👉 The basics of auto lending: There are three things that lenders look at when determining whether to approve a customer for a loan. Those three things are 1) ability, 2) stability and 3) willingness.

Ability: do you have the ability to actually make the payments? Will your income support the payment? Based on your debt-to-income ratio, do you fall into the guidelines that the banks use to make this determination?

Stability: how long have you been doing what you do? How long have you been on your job, at your address? Do you job hop or move frequently? Have you shown the requisite stability within your field to satisfy the bank’s lending policies?

Willingness: how have you handled your past credit obligations? Have you handled them in a timely manner or have you sometimes fallen behind? In other words, have you shown a willingness to pay your bills in a timely fashion? 

If you can satisfy those three criteria, then you should be approved for a loan at a good interest rate.

Now, we’ll walk you through the key factors you need to consider when applying for a car loan (with the goal of securing a great rate).

Check your credit score

Your credit score plays a significant role in determining your auto loan interest rate. Before shopping for a car, check your credit score and work on improving it. For example, pay off outstanding debts, make timely payments, and keep your credit utilization low. Be cautious of applying for multiple credit cards or loans in a short period, as this may negatively impact your score. Monitor your credit report for errors and dispute them promptly. 

👉 Pro Tip: Always let the dealership Finance Manager know that YOU know your credit well! This puts you in a more controlling position.

These are the latest average new and used car loan rates by credit score

Save for a down payment

Aim for a down payment of at least 20% of the car’s purchase price to minimize interest costs and potentially qualify for a lower rate. For instance, on a $30,000 car, a 20% down payment would be $6,000. By saving more for your down payment, you can reduce the loan amount, lower monthly payments, and decrease the likelihood of being upside down on your loan.

👉 Pro Tip: Banks and credit unions like to see a healthy loan-to-value ratio. This means that a higher down payment is always a good thing. 

Shop around for financing

Don’t limit yourself to dealership financing. Once you know your credit score, search online for reputable credit unions that operate in your state (start here with CarEdge). Most credit unions publish their new and used auto loan rates on their website. This gives you an excellent idea of what the best current interest rates are. This arms you with knowledge when it comes to speaking with the Finance Manager. If you find a great deal, speak to the loan officer, and consider applying for a car loan. Even if you decide to finance with the dealership, this pre-approval will come in handy in the dealership finance office. Consider working with CarEdge-approved credit unions for excellent rates, and top-tier customer service.

👉 Pro Tip: Protect your credit. Don’t aimlessly apply to credit unions online but if you find one with great rates, always speak with a loan officer first, get all your questions answered on their process and then apply.

Consider loan terms

While longer loan terms may have lower monthly payments, they also mean you’ll pay more interest over the life of the loan. Opt for a shorter loan term if it fits your budget to save on interest costs. For example, choosing a 48-month loan term instead of a 72-month term on a $25,000 loan at a 5% interest rate can save you over $1,500 in interest payments.

Look for manufacturer incentives

Automakers often offer special financing deals or cash rebates to encourage new car sales. Keep an eye out for these incentives, such as low or 0% APR financing, which can significantly reduce your overall interest costs. Be sure to read the fine print and weigh the pros and cons of these offers before deciding. We keep track of the best manufacturer incentives here.

👉 Pro Tip: Don’t expect the dealership finance manager to advertise the manufacturer promotion. Do your research online before shopping.

Choose a Certified Pre-Owned vehicle

Browse CPO car listings with CarEdge

If you’re buying a used car, consider a manufacturer-certified Certified Pre-Owned (CPO) vehicle. Manufacturer CPO programs have stricter guidelines and typically offer enhanced warranty coverage. Stay away from third-party CPOs, at least if you’re looking for better rates. Browse certified pre-owned (CPO) car listings at CarEdge Car Search to find the perfect vehicle with local market data.

👉 Pro Tip: Let the dealership Finance Manager know that YOU know there are often APR Incentive rates for manufacturer CPO’s. So speak their language and ask them to “check their rate sheet for subvented rates on the CPO”.

Refinance existing loans

If you are stuck with a higher-than-ideal rate, consider refinancing to save on interest costs and potentially lower your monthly payment. Refinancing involves taking out a new loan to pay off your existing loan, ideally with a lower interest rate. Refinancing matters more today than it has in the recent past. With rates being so high right now, even half of a point could save you big money over the life of the loan! This can be a smart move if your credit score has improved since you initially took out the loan or if you discovered in hindsight that the dealership put you in a higher interest loan. 

Did the car dealership put you in a higher-interest loan? Refinance with CarEdge-approved credit unions to get started with no hit to your credit score.

👉 Pro Tip: When refinancing, check to see if the bank or credit union has any incentives (such as for automatic withdrawals, or career-based incentives for teachers, first responders, military and more).

Avoid dealer finance markups

Dealerships may add a markup to the interest rate they offer on car loans, pocketing the difference as profit. Be aware of this practice and ask for the ‘Buy Rate’ to see how much the dealership is marking up the loan. If you have a pre-approval from a credit union, use it as leverage to negotiate the best rate with the dealer. It’s smart to understand how dealers make money before negotiating.

We’ll explain exactly how to negotiate marked-up interest rates in the next section. Stay tuned!

Pay off the loan early

If your car loan allows for early repayment without penalties, consider making extra payments towards “principal only” to pay the loan off ahead of schedule.

👉 Pro Tip: Use an amortization schedule to see how fast you’ll pay down your loan!

This can save you a significant amount of money on interest charges over the life of the loan. Just be sure to double-check your loan agreement for any prepayment penalties before proceeding.

Now, let’s go over a real-world scenario that will be VERY similar to what you’ll encounter at the dealership. It’s time to apply your knowledge!

Part Two: Apply What You Learned

Check out our series of car buying roleplay videos for unbeatable insights into what it’s like to make a deal!

The best way to learn how to effectively negotiate in the finance office is to prepare for the situations and conversations you’re likely to encounter. What better way to do that than creating a real-world script with the help of dealership professionals who’ve been through this hundreds of times? The following is an example conversation between an empowered, prepared car buyer and a car dealership auto Finance Manager. Don’t forget to check out the original CarEdge Cheat Sheet to Car Buying for more word-for-word car buying help! 

Finance Manager: Hi, I’m the finance manager here at the dealership. I understand you’re interested in purchasing a car today. Is that correct?

You: Yes, that’s correct. I’ve already chosen the car I want, and now I’m looking to finalize the financing.

Scene 1: Credit Score

Finance Manager: Great, let’s start by filling out a credit application. 

(Note: The dealership is going to need to run a credit report and will insist on doing so in order to determine what interest rates you may qualify for. People usually only know their overall credit score and not their auto credit score which by its nature is what banks need.)

You: I know my credit well and I have Tier One credit. 

👉 Pro Tip: If you have a lower credit score, you can ask for a ‘tier bump’ at this point. A tier bump is essentially when the dealership finance manager would call the lender to ask for a higher rate, despite the buyer’s lower credit.

Scene 2: Financing Options

Finance Manager: That’s a decent score. Now let’s discuss financing options. We have some deals available through our dealership.

You: Thanks, but I’ve already shopped around for financing and have already spoken with my credit union loan officer and I will qualify for their best rate. I’d like to see how your dealership’s rates compare before making a decision. Also, I’ve been approved for a lower rate with a credit union. Can you beat that rate?

👉 Pro Tip: If you’re borrowing over $30,000, consider asking about a ‘large loan discount’, which is sometimes an option for higher borrowing amounts. See the video we shared in Scene One for more information!

Finance Manager: We’ll certainly do our best to match or beat the rate you’ve received from the credit union. Let me check our current offers. Based on your credit score, we can offer you a 60-month loan at an interest rate of 4.5%.

You: I appreciate the offer, but I’d prefer a shorter loan term of 48 months to save on interest costs over the life of the loan. Can you provide a quote for that term and see if you can match or beat the rate I received from the credit union?

Finance Manager: Sure, let me recalculate the rates for a 48-month term and see if we can match or beat your credit union’s rate. Give me a moment. 

Alright, I’ve looked into our current offers for a 48-month loan term. We can offer you a 48-month loan at an interest rate of 0.5% lower than the offer from your credit union.

You: That’s great! I appreciate you working with me to secure a better rate. I think I’ll go with this financing option from the dealership. Interest adds up!

Scene 3: Down Payment

Finance Manager: How much do you plan on putting down as a down payment?

You: I’m prepared to make a down payment of 20% of the car’s purchase price to minimize interest costs and avoid the need for GAP insurance. Can you double check if there are any additional manufacturer incentives or offers available that could get me an even lower rate?

Scene 4: Certified Pre-Owned (CPO)

You: I noticed that the car I’m interested in is a Certified Pre-Owned (CPO) vehicle. Please check your “rate sheet” for subvented rates on the CPO. Does that qualify me for a lower interest rate? 

👉 Pro Tip: It will go a long way to show that you’re familiar with dealership terms like the ones we’ve included here. Don’t miss this FREE resource: The Car Buyer’s Glossary of Terms

Finance Manager: Yes, CPO vehicles typically do qualify for lower rates due to their lower risk. With that in mind, I can offer you a 3.9% interest rate for a 48-month loan with the manufacturer incentive.

Scene 5: Avoiding Dealer Finance Rate Markups

You: I appreciate the offer, but what is the rate on my approval that you received? I’d like to see a direct quote from the lender.

(Note: You can ask to see the direct quote from the lender, but know that since this is indirect lending with the dealership acting as an intermediary, they are not required to share that information with you. Their answer simply may be, “this is the rate that I can offer you”.)

Finance Manager: You received a subvented rate of 3.9%.

You: Is that the Buy Rate?

Finance Manager: No, we mark it up by a point.

You: I would really love that Buy Rate. I know my credit union offered 4.0%, but if you can give me 3.5%, I won’t refinance the loan immediately.

Finance Manager: Okay, I can do that.

👉 Pro Tip: The Finance Manager always wants to avoid the charge-back on the refinance. Basically, if you refinance right away, they’re not making any money from selling you the loan.

Scene 6: Add-ons and Extended Warranty

Finance Manager: Before we finalize the paperwork, I’d like to go over a few additional products we offer that could save you money in the long run. First, we have a Theft Protection Package that will reimburse you in case your car is stolen.

You: Thanks for mentioning it, but I’ve already researched that option and I don’t think it’s necessary for my situation. I’ll pass on the Theft Protection Package.

Finance Manager: Alright, that’s fine. Another package I’d recommend is our Tire Care Package. It covers tire replacements and rotations, ensuring your tires are always in great condition.

You: I appreciate the suggestion, but I’ve budgeted for tire maintenance separately and will handle it on my own. I won’t be needing the Tire Care Package.

Finance Manager: No problem, I understand. Lastly, we offer an Extended Warranty that covers any unexpected repairs or breakdowns after the manufacturer’s warranty expires. It’s a great way to protect your investment. I can offer this coverage to you for $30/month. 

👉 Pro Tip: Finance Managers will not give you the actual price unless you ask for it. They prefer to tell you the monthly payment to downplay the cost.

You: I’ve actually already looked into extended warranties, and I found the same exact coverage through CarEdge for hundreds of dollars less. I’ll be purchasing their warranty instead.

Finance Manager: Alright, I respect your decision. Let’s move forward and finalize the paperwork for your new car!

(Note: If the finance manager attempts to force you to purchase any of their add-on products, demand to see the contract. Every product includes a contract, and on there, it will clearly state that the product is not required to secure financing.)

👉 Pro Tip: The purchase of products in the finance office cannot be tied to your interest rate. For example, a Finance Manager cannot say “if you get the extended warranty, you’ll get a lower interest rate”. 

You can say “No” to everything if you want and sign a Declination Disclosure. However, it is part of Compliance that the Finance Manager lets you know the additional products that are available to 100% of the buyers, 100% of the time.

The Complete List: Never Pay These Fake Dealership Fees

Scene 7: Signing the Paperwork

Finance Manager: Here’s your base payment at 3.5% for 48 months. Are you ready to proceed with this offer?

You: Yes, that sounds great. Let’s finalize the paperwork and complete the purchase.

By employing the expert advice provided in the previous responses, the car buyer in this example has successfully navigated the auto financing process, and secured a great deal. Despite the initial offer from the dealership being substantially higher interest rate, the buyer used their knowledge of auto financing to get a better rate. By showing that they understand the process through questioning every aspect of the deal and speaking dealership language, the buyer stayed in control, ultimately saving hundreds to thousands of dollars over the life of the loan. 

You’ve Got This! We’re Available to Help Anytime

CarEdge Dealer Reviews

Check out CarEdge Dealer Reviews to see what deals are near you!

With these car loan tips in hand, you’re well on your way to making the best possible auto financing decisions. But don’t stop there! Join the 100% FREE CarEdge Community to connect with our Car Coaches and thousands of drivers like yourself. Looking for expert tools and assistance? CarEdge Data and CarEdge Coach offer expert guidance and personalized support throughout the car buying process. Our experienced professionals will help you save money, avoid costly mistakes, and achieve your car buying goals. 

Don’t go through the car buying process alone – let CarEdge empower you with industry-leading tools and expert coaching. Try CarEdge Data and CarEdge Coach today and drive away with confidence.

Want to enter the dealership even more prepared? Cover all the bases with Deal School, included with CarEdge Coach. Enjoy the free sample of the AMAZING content Deal School has to offer!

Car Buying in 2023: Is It the Right Time to Buy, and Can We Expect Lower Prices? Here’s What the Experts Think

Car Buying in 2023: Is It the Right Time to Buy, and Can We Expect Lower Prices? Here’s What the Experts Think

Dealer lot inventory is on the rise, but where are the deals at?! As we move further into 2023, many potential car buyers are wondering, “is now a good time to buy a car?” and “will car prices go down in 2023?” The good news is that recent market trends indicate that the tide is starting to turn, with car prices slowly beginning to decrease and negotiability on the rise. However, there are big differences between the new and used car markets today. Let’s take a closer look at the details.

Patience, Fellow Car Buyers

New car prices are dropping in 2023 as incentives rise and dealers look to sell quickly. Source: Cox Automotive

According to CarEdge’s Ray Shefska, recent trends suggest that there’s good news for car buyers, with prices gradually decreasing and more room for negotiation on the horizon.

Ray notes that “March broke a string of 20 straight months where the average new car prices transacted at above MSRP, in March the average price paid was $171 below MSRP.”

“Although this drop might not seem significant, it’s a noteworthy development, indicating that dealerships are becoming more open to selling cars at lower prices,” he explained. Car manufacturers are increasing incentives to attract more buyers to the market, ultimately benefiting car shoppers.

CarEdge’s Car Coaches note that patience will be rewarded as we head into the summer 2023 car buying season. “Consumers who are patient will find themselves in a much better position as negotiability should increase as we get into the summer months.” 

Used Car Prices Are a Different Story

is now a good time to buy a car? 2023 update
Weekly used car price data shows that in April, prices rose for the first time in 2023.

It’s important to note that there are considerable differences between the new and used car markets. New car transaction prices are steadily dropping as dealers try to move more inventory after years of nearly vacant lots. On the other hand, used car prices are increasing as of spring 2023. The latest used car price data from Black Book shows that after 30 weeks of wholesale price declines, used car prices have actually increased for the past several weeks. In April, used car prices increased at the retail level too. 

CarEdge’s Car Coaches don’t expect rising used car prices to become a new long-term trend like we saw in 2021 and early 2022. However, there could be a month or two of additional slight price hikes. 

We track used car prices weekly here.

High Interest Rates Motivate Dealers

How do rising interest rates affect car buying? Of course, buyers who finance are going to pay more in interest, no matter their credit score. But other things change too. Despite higher APRs, there can be benefits for buyers. Car dealers pay interest on lot inventory until it is sold. Think of dealer floor plan financing almost like a credit card made solely for purchasing vehicle inventory. When the federal reserve raises the cost of borrowing money, all kinds of credit will become more expensive, and that includes car lot floor-planning. 

With higher floor plan costs, rising lot inventories and incentive spending on the rise, dealers will be motivated to negotiate. Therefore, the longer you can wait to buy a car in 2023, the more likely you’ll be able to negotiate thousands off of your deal.

See the best manufacturer incentives this month (updated)

Furthermore, Ray predicts that it will be a lot easier to secure a deal below MSRP as we get deeper into summer. In fact, the latest data from Kelly Blue Book shows that for the first time in two years, new-vehicle transaction prices fell below MSRP in March. The CarEdge Coaches expect that trend to continue.

Sadly, you and I are well aware that cars are far from cheap these days. The average price paid for a new car is still around $48,000. If you’re looking to go electric, expect to pay 20% more. Even in this market, our Coaches have proven even the toughest new and used cars are negotiable. Check out these success stories from happy drivers around the nation. CarEdge Coaches have even negotiated thousands of dollars off of EV prices in 2023.

Expert Car Buying Help Is Here!

CarEdge Dealer Reviews
Have you checked out CarEdge Dealer Reviews? See which dealers have the best pricing, and learn which ones to avoid!

We’re real people empowering you to save real money on your next auto. How can we help? Check out hundreds of 100% free resources, great YouTube videos, and the fastest-growing online auto forum today, the CarEdge Community. We just launched Dealer Reviews, where you can see nearly 3,000 crowdsourced car dealer and deal reviews.

Looking for behind-the-scenes auto market data to inform your buying decisions? That’s exactly why we created CarEdge Data. Unlock the Black Book car valuations that dealers use, CarEdge negotiation scores, official recommendations, and local market data for every car on CarEdge Car Search with CarEdge Data.


Ready for expert 1:1 help with your deal? Our Car Coaches are ready to work with you to secure the best deal on out-the-door prices, financing, and more. Learn more about our CarEdge Coach unlimited access plan. We look forward to meeting you.

Used Car Price Trends in 2022

Used Car Price Trends in 2022

Updated for 2023: https://caredge.com/guides/used-car-price-trends-in-2023

Used car prices trends for 2022 have been interesting. In 2021, unlike any other time in history, used car prices increased. What used to be a depreciating hunk of metal was an appreciating asset, but the car price bubble wasn’t sustainable in the long term. With used car prices remaining volatile, it’s never been more important to track the value of your car.

During the first quarter of 2022 used car prices dropped nearly 5% on the wholesale markets. Springtime brought another increase in used car prices. As we approach autumn, we’ve now seen 24 consecutive weeks of used car prices dropping at the wholesale level. Used car prices are going down, as you’ll see in the latest data below.

While wholesale used car prices have declined significantly over the past ten weeks, retail used car prices have remained fairly steady. That may soon change. The demand for used cars has weakened in recent weeks, and we’re now seeing increases in used vehicle listings as cars sit on the lot longer.

Used car prices in 2023 will continue to decrease. Higher interest rates combined with greater new car inventory will continue downward pressure on used car prices in 2023.

Get the most when you sell your car.

Compare and choose multiple offers in minutes:

👉 Bookmark this page. Just like we did last year, each week we’ll update this URL with the latest used car price trends. Our hope is that by being informed of the trends in used car prices you can make smart financial decisions about when to trade-in, sell, or buy a car.

Without further ado, let’s dive in.

Used Car Prices 2022 – December 2022 Update

As of December, used car prices declined (at wholesale auctions) for 24 weeks in a row. We expect this trend to increasingly translate to retail sales.

What types of used cars are dropping, which are increasing? Is now a good time to buy a used car? Should you sell your car now, or wait for prices to go back up? Let’s answer those questions and more.

Car prices are going down. Is the car bubble bursting? Let’s look at the data.

used car prices december 2022

Through April , used car and SUV prices declined by ~5%. This was more depreciation than we’d expect in a “normal” year for the same time period. The rate of depreciation increased in February from January, however the trend reversed in March and April.

In May and June, we saw a reversal, with used car and SUV prices increasing week-over-week on the wholesale market. In December, the overall market is dropping, with no vehicle classes continuing to appreciate.

The overall wholesale used car market saw prices drop -0.88% last week. Cumulatively, used car prices have dropped -19% at the wholesale level over the past 6 months.

Used car prices (wholesale)

Mass-market car segments dropped the most last week. Compact and sub-compact cars dropped by over -1%, mid-size cars by -0.86%, and full-size cars by -0.43%. Overall luxury car prices fell by about 1% last week.

All used car segments saw declining prices last week, with an average of -0.86%. The week before, car prices were down -0.87%.

used car price trends 2022
Source: Black Book

Used Truck Prices (Wholesale)

We are now seeing a sharp reversal in light-duty truck segments. The overall truck segment decreased -0.90% last week. Compact crossover prices declined the most, by -1.20%.

Mainstream crossover and SUV prices all fell by between -0.79% and -1.20% last week.

used truck and SUV prices, December 2022
Source: Black Book

Since the onset of the pandemic, full-size vans have appreciated more than 60%. Now, we’ve seen wholesale full-size van prices drop about -5.0% in the past two months. This week, van prices dropped -0.41% in one week.

Year-Over-Year Prices Remain High

used car price trends

The graph below looks at trends in wholesale prices of 2-6-year-old vehicles, indexed to the first week of the year.

Retail used car prices are finally declining

Used car prices dropping in 2022
In 2022 (green), used car prices have dropped at the retail level.

When will retail used car prices go down? Black Book’s weekly price index suggests that used car prices will steadily drop in 2023, after four months of slow but steady price declines in 2022. We expect prices to continue falling into 2023 due to the combined effects of higher interest rates restricting buying and the greater availability of new cars, which often have competitive promotional APRs.

We’re starting to see retail prices come down. Cars are also sitting on the lot for longer. As more vehicles sit on the lot, dealers will be more willing to negotiate.

Use this negotiation cheat sheet to stay in control of your deal

Older used cars have appreciated most

A new phenomenon we have begun tracking is that older used cars are appreciating more rapidly than younger used cars.

older model used car prices
*Data as of April 2022

This is primarily a function of consumer demand. Retail customers that want to purchase a car at a sub $20,000 price-point are being forced to look at older used vehicles because the new ones have increased in value beyond their budget. This is scary, crazy, and a whole host of other words.

Is now a good time to buy a used car?

Wait until at least mid-September to buy a car. We expect to see retail prices decline beginning in early September, following eleven weeks of wholesale declines.

Used cars are sitting on the dealer lots for longer, and that creates better conditions for negotiating a better deal.

When should I sell my car to get the most money?

Sell as soon as you can. Used car prices are already dropping, and we expect retail prices to decline more in September.

To sell your car for the most money, be sure to read this guide.

How much did used car prices increase in 2021?

Depending on who you ask (Cox Automotive, Edmunds, CarGurus, or Black Book), retail used car prices increased anywhere from 32% to 36% in 2021.

black book 2021 used car price trends

Black Book shows a 35% increase in retail used car prices for 2021 (the purple line). For comparison, the orange line shows a 7% appreciation for used car prices in 2020, and the blue line shows a 3% depreciation of used car values for 2019.

Here’s a month-over-month table showing used car price trends for 2021:

MonthAverage Used Car Price
January$22,112
February$21,573
March$21,343
April$22,568
May$24,414
June$25,101
July$25,500
August$25,890
September$26,548
October$27,067
November$27,569
December$29,000

This data, supplied by Cox Automotive, shows the incredible ascent used car prices took in 2021.

Used van prices increased the most

Different types of vehicles have appreciated more than others. Vans have increased in value the most of all used cars. Take a look at this chart and data from CarGurus.

used van prices increase in 2021

In 2021 used van prices increased over 56%, whereas CarGurus’ data showed a more modest (yet still insane) 34% increase for used car prices in general.

Used van prices have increased the most across vehicle segments for a few reasons:

  • Vans are typically lower profit new vehicles for automakers, and as a result of not having enough chips to produce new vehicles, automakers are drastically limited production of new vans;
  • Many people have taken to converting vans into their living quarters;
  • Many businesses that previously would have bought their vans from fleet sales are going to the used market to find supply.

For these reasons, and many more, used van prices have increased the most of any segment of vehicle.

Every used car has two prices; the wholesale price, and the retail price. As consumers we typically concern ourselves with the retail price, and with good reason, unless you have a dealer’s license you can’t buy a car wholesale at an auction.

That being said, wholesale used car prices are the lifeblood of car dealers, and the used car price trends we saw on the wholesale side in 2021 were truly unfathomable. While retail used car prices increased ~36% in 2021, wholesale used car prices rose 52%.

black book 2021 wholesale used car price trends

There is an obvious interplay between wholesale and retail prices. As wholesale prices increase, we can expect retail to prices to do the same. Here at CarEdge we are concerned that retail prices will stay highly elevated for a long time (potentially all the way through the fall of 2022) because car dealers will not want to discount their inventory that they grossly overpaid for earlier in the year.

Interactive data

Thanks to our friends at foureyes, we can share with you this real-time updating data set on used and new car prices.

Car Buying in 2023: Is It the Right Time to Buy, and Can We Expect Lower Prices? Here’s What the Experts Think

Used Car Price Trends for 2023 (Updated Weekly)

The used car market is collapsing in 2023. Prices haven’t fallen this fast since 2020. Furthermore, inventory is declining as dealers balk at the prospect of buying overpriced cars at auction. With used car prices remaining volatile, it’s never been more important to track the value of your car.

We had seen 30 consecutive weeks of used car prices dropping at the wholesale level before a sharp reversal beginning in February. Used car prices are dropping again. As of September 2023, prices are dropping at wholesale auctions AND retail dealer lots.

Get the most when you sell your car.

Compare and choose multiple offers in minutes:

👉 Bookmark this page. Each week we’ll update this URL with the latest used car price trends. Our hope is that by being informed of the trends in used car prices you can make smart financial decisions about when to trade-in, sell, or buy a car.

Without further ado, let’s dive in.

Used Car Prices – September 2023 Update

What types of used cars are dropping, which are increasing? Is now a good time to buy a used car? Should you sell your car now, or wait for prices to go back up? Let’s answer those questions and more.

According to the latest used car market data from Black Book, the used car market is dropping fast at wholesale markets. When will retail used car prices drop? We’ll get into that below. First, let’s take a closer look at wholesale prices last week.

Is the car bubble bursting? Let’s look at the data.

used car prices in September 2023

The overall wholesale used car market saw prices decrease -0.73% last week. The week prior, prices fell -0.75%. Used car prices are still falling at the wholesale level, but it will take another month of data before we know how retail prices will respond.

Used car prices (wholesale)

Most car segments decreased this week. The overall car segment decreased by -0.59%, compared to -0.89% last week. Full-size car prices decreased the most (-0.99%). Compact car prices have fallen over 9.5% in the past few months. Every segment saw declines last week.

September 2023 Car Price Trends. Source: Black Book

Used Truck Prices (Wholesale)

We’ve seen a reversal in light-duty truck segments. The overall truck segment decreased -0.79% last week compared to -0.69% last week.

All SUV and truck segments saw price decreases last week.

Used truck and SUV prices, September 2023. Source: Black Book

Since the onset of the pandemic, full-size vans have appreciated more than 60%. Now, we’ve seen wholesale full-size van prices drop -17% in the past three months.

Full-size truck prices were the most stable in early 2023, but are now dropping quickly as new truck inventory drives competition with the used truck market. Truck prices dropped over 5% at auction last month alone. Considering how high truck prices average, this amounts to thousands of dollars of lost value.

We track the average price of electric vehicles here. EV prices are dropping!

Retail used car prices have eliminated this year’s gains

Beginning in June 2022 (green), retail used car prices started to drop. In 2023 (gray), retail used car prices are rising.

As the data above shows, retail car prices are slowly but steadily dropping. In fact, in September, retail used car prices eliminated 2023’s overall gains, returning to where prices were when the year began.

Hybrid and EV prices remain elevated above the overall market, but the gap is narrowing. The average transaction price for an electric vehicle is now 14% higher than the overall market. That’s still a lot of money, but is much less than the 20% we saw early this year.

Here’s our monthly update on EV prices.

Used Car Inventory – Retail Markets

used car inventory levels in 2023

The graph above shows that used car inventory is dropping slowly this summer. This could be a reflection of dealer’s hesitation towards inflated auction prices for used inventory. Car buyers are weary of overpriced used cars too, and are playing the waiting game as the market cools. On top of it all, interest rates are at 10-year highs.

Use this negotiation cheat sheet to stay in control of your deal

Older used cars have appreciated most

A new phenomenon we have begun tracking is that older used cars are appreciating more rapidly than younger used cars.

older model used car prices
*Data as of April 2022

This is primarily a function of consumer demand. Retail customers that want to purchase a car at a sub $20,000 price-point are being forced to look at older used vehicles because the new ones have increased in value beyond their budget. This is scary, crazy, and a whole host of other words.

How much did used car prices increase in 2021?

Depending on who you ask (Cox Automotive, Edmunds, CarGurus, or Black Book), retail used car prices increased anywhere from 32% to 36% in 2021.

black book 2021 used car price trends

Black Book shows a 35% increase in retail used car prices for 2021 (the purple line). For comparison, the orange line shows a 7% appreciation for used car prices in 2020, and the blue line shows a 3% depreciation of used car values for 2019.

Here’s a month-over-month table showing used car price trends for 2021:

MonthAverage Used Car Price
January$22,112
February$21,573
March$21,343
April$22,568
May$24,414
June$25,101
July$25,500
August$25,890
September$26,548
October$27,067
November$27,569
December$29,000

This data, supplied by Cox Automotive, shows the incredible ascent used car prices took in 2021.

Used van prices increased the most

Different types of vehicles have appreciated more than others. Vans have increased in value the most of all used cars. Take a look at this chart and data from CarGurus.

used van prices increase in 2021

In 2021 used van prices increased over 56%, whereas CarGurus’ data showed a more modest (yet still insane) 34% increase for used car prices in general.

Used van prices have increased the most across vehicle segments for a few reasons:

  • Vans are typically lower profit new vehicles for automakers, and as a result of not having enough chips to produce new vehicles, automakers are drastically limited production of new vans;
  • Many people have taken to converting vans into their living quarters;
  • Many businesses that previously would have bought their vans from fleet sales are going to the used market to find supply.

For these reasons, and many more, used van prices have increased the most of any segment of vehicle.

Every used car has two prices; the wholesale price, and the retail price. As consumers we typically concern ourselves with the retail price, and with good reason, unless you have a dealer’s license you can’t buy a car wholesale at an auction.

That being said, wholesale used car prices are the lifeblood of car dealers, and the used car price trends we saw on the wholesale side in 2021 were truly unfathomable. While retail used car prices increased ~36% in 2021, wholesale used car prices rose 52%.

black book 2021 wholesale used car price trends

There is an obvious interplay between wholesale and retail prices. As wholesale prices increase, we can expect retail to prices to do the same. Here at YAA we are concerned that retail prices will stay highly elevated for a long time (potentially all the way through the fall of 2022) because car dealers will not want to discount their inventory that they grossly overpaid for earlier in the year.

Interactive data

Thanks to our friends at foureyes, we can share with you this real-time updating data set on used and new car prices.