The Vehicles With the Highest and Lowest Destination Charges

The Vehicles With the Highest and Lowest Destination Charges

highest destination charges in 2023

After a year of inflation, it shouldn’t surprise you that yet another facet of car pricing is on the rise. Seasoned car buyers know it all too well: automakers and dealers are quick to pass along new costs to the consumer. This time, it’s rising destination charges. A “destination charge” or “delivery fee” is an auto manufacturer’s fee for delivering a vehicle from the factory to the dealership. Destination charges are a dreaded part of the total MSRP. 

In 2023, destination charges on new cars are increasing. With interest rates increasing, every dollar matters even more, and understanding these fees can help you prepare for what to expect. These are the new cars with the highest and lowest destination charges in 2023. 

The Cars With the Lowest Destination Charges

lowest new car destination charges
MakeModelDestination Charge (2023)
MINICooper$995
MINIHardtop$995
MINIClubman$995
MINICountryman$995
ChevroletBolt$995
ChevroletMalibu$995
SubaruImpreza$1,020
SubaruLegacy$1,020
SubaruBRZ$1,020
HondaAccord$1,095
NissanAltima$1,095
VolkswagenJetta$1,095
VolkswagenPassat$1,095
VolkswagenGolf$1,095

MINI doesn’t just have the smallest cars, the beloved English brand also has the smallest destination charges of any automaker. At ‘just’ $995 for delivery to a MINI dealer near you, the destination fee is 30% lower than the industry average of about $1,400 in 2023. Will these be the last destination fees under $1,000? With where the market is headed, it’s quite likely.

The Cars With the Highest Destination Charges

MakeModelDestination Charge (2023)
JeepGrand Wagoneer$2,000
JeepWagoneer$2,000
Ram1500$1,895
CadillacEscalade$1,895
ChevroletSilverado$1,895
ChevroletSuburban$1,895
ChevroletTahoe$1,895
FordF-150$1,895
FordExpedition$1,895
GMCSierra$1,895
GMCYukon$1,895
ToyotaTundra$1,795
NissanTitan$1,795
JeepGrand Cherokee$1,795
JeepCherokee$1,795
JeepCompass$1,795
JeepGladiator$1,795
JeepRenegade$1,795
JeepWrangler$1,795

New car destination charges are up by a lot in recent years. Since 2017, destination fees are up by about 20% on average. Some manufacturers are much worse, with further hikes announced in recent months. 

General Motors, Ford, Stellantis, Honda, Porsche, Hyundai and many others increased destination charges by over 20% in the past five years. In 2023, an unfortunate milestone was reached: the first mainstream models with $2,000 destination charges.

Jeep, Ram and Dodge Force Higher Destination Charges On Buyers

Ram 1500 destination charge

Stellantis charges the most for new car destination fees. The Jeep Wagoneer and Grand Wagoneer are both at $2,000 in 2023. But these two SUVs may not be alone in the $2,000-plus club for long. General Motors and Ford both raised their fees this year, with many models at $1,895. 

America’s most popular trucks come with higher destination charges these days. The Ram 1500, Ford F-150 and Chevrolet Silverado all now have destination charges of $1,895 in 2023. That’s up hundreds of dollars from just a few years prior. 

Are Destination Charges Negotiable?

Destination charges as a line item on the bill of sale are not negotiable, but you can offset the expense with negotiation know-how elsewhere in your car deal.

Here’s how CarEdge’s Ray Shefska explained how you can think of negotiating destination charges on a new car. 

“The destination charges on the Monroney label (window sticker) are not negotiable in and of itself. The charge is part of the MSRP. When negotiating the price of a vehicle, the starting point is usually MSRP, and a discount off of MSRP can be negotiated. So, no you cannot negotiate the destination charge on a brand new vehicle, but you can negotiate savings elsewhere to offset this fee.”

As new car MSRPs continue to rise, negotiating car prices is more important than ever. 

Here’s 10 cars with big MSRP increases in 2023, and the new cars with the smallest price increases. Is your next car on either list? Let us know what prices you’re seeing in the comments below.

Get Help Negotiating Car Prices

Saving you money is what drives us. Whether you’re looking for 100% free resources or 1:1 help with buying, CarEdge has you covered. Where should you start? Everyone loves free stuff. Become an empowered car buyer with these free reader favorites from CarEdge:

Car Buying Negotiation Cheat Sheet

How to Challenge Forced Add-Ons

Price Predictions For 2023 – New and Used Cars

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  • CarEdge Coaches provide 1:1 guidance through every step of the car buying process. 
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Learn more about how CarEdge can help.

Used Car Prices Are Falling, and It’s Only the Beginning

Used Car Prices Are Falling, and It’s Only the Beginning

What goes up, must come down, and someone’s going to lose money. In this case, it’s most likely going to be car dealers on the losing end of the market.

Used car prices climbed 52 percent in 2021 and 2022, an unprecedented and historic price bubble that is slowly but surely bursting. The average price paid for a used car peaked at $33,000, an all-time record. But times are changing! Higher interest rates, rising new car inventory and fears of recession put an end to the madness as 2022 came to a close. In 2023, used car prices have much further to fall. The latest data from Black Book paints a picture of falling prices, and ultimately, perhaps a sense of normalcy. 

Let’s take a look at what the latest used car price data reveals, and what our team of auto experts and consumer advocates expect for used car prices in 2023.

The Latest Used Car Price Update

Used car prices, 2019-2023. Source: Black Book
Used car prices, 2019-2023. Source: Black Book

Used car prices are falling, but let’s not forget where we’re at, and where we’ve been. Black Books’ 2022 Year in Review puts used car prices into perspective remarkably.

“The average wholesale price of a 4-year-old vehicle at the beginning of the pandemic in January of 2020 was about $13.5k. At the end of December 2022, the average wholesale price of a 4-year-old vehicle was about $21.9k – almost a 60% increase above the pre-pandemic norm (so, a $10k car from early 2020 would cost about $16k right now).”

Used retail prices have fallen, but are STILL about 35% above pre-pandemic levels.

ABC’s Good Morning America recently caught up with Zach Shefska to talk car prices. See Zach on America’s most-watched morning show!

After six months of wholesale price declines, there’s still a long way to go before reaching some semblance of normalcy and price stabilization.

Data from Edmunds shows where the retail used car market stands heading into 2023. The average price of a used car in December was $29,533, down nearly $1,600 (-5%) from the record high of $31,095 reached in April 2022. 

Today’s average used car price is about the same as the average NEW car price in 2010.

This week, used car prices continue to fall. Data from wholesale auctions is what you could call the pulse of the used car market. Typically, trends in wholesale prices are reflected in retail pricing three to six weeks after auction. 

2023 has kicked off with wholesale used car prices continuing to fall. Last week, the overall market fell -0.79%. In recent weeks, luxury and near-luxury cars and crossovers have been falling the quickest, by nearly 2% week-over-week in some luxury segments.

Used car prices, January 2023. Source: Black Book
Used car prices, January 2023. Source: Black Book

All nine car segments decreased last week, with three reporting declines greater than 1% (Prestige Luxury, -1.76%; Near Luxury, -1.28%; Compact, -1.18%). Compact Cars reported the largest decline for the segment since early November.

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

All thirteen truck segments reported declines last week, with three of those reporting a decline of over 1%. However, prices for used full-size trucks have been slowly falling after steeper drops in 2022. The average price paid for a used truck is $37,000, compared with $60,000 for a new full-size truck.

Interestingly, Tesla’s massive price cuts are already impacting used EV valuations. 

Our CarEdge Coaches recently shared which cars and trucks are most negotiable right now. Check out the latest info on how to negotiate car prices here.

Interest Rates Mean Cash Is King

The average down payment for new and used cars hit record highs in 2022, climbing to $6,780 and $3,921, respectively. Car buyers are putting more money down to do what they can to offset the higher cost of borrowing money. 

About 40% of used car purchases are financed, compared to nearly 84% for new cars. Unsurprisingly, these figures are in a steady decline as car prices have raced beyond most buyer’s budgets.

Paying cash for cars is not a bad idea, but you may be missing out on the best deal if you do. This sounds odd, and it’s definitely worth exploring further if you’re in a position to pay cash. Be sure to check out this guide to paying cash for cars!

Predictions For Car Prices in 2023

Our own Ray Shefska recently shared his biggest predictions for 2023. With over 40 years in the business, Ray’s insights touch on both the usual suspects and some surprisingly unsung themes of today’s auto market. 

These are Ray’s big predictions for 2023:

1. New car inventory will continue to grow

2. Used car affordability will continue to keep sales volume down 

3. Rising interest rates will lower demand and worsen affordability

4. Manufacturer incentives will increase

5. Cash is king in 2023

Curious to learn more about these predictions for the new year? Check out the full article here.

A Word of Caution

Before you head to the dealership to negotiate a deal, check your loan balance for your trade-in. According to Edmunds’ analysis, 17.4% of new vehicle sales with a trade-in had negative equity in Q4 2022, up from 14.9% in Q4 2021. Negative equity is when you still owe more than the car is worth at the time of trade-in. Having negative equity will add to the amount of your next auto loan, making payments higher, and resulting in even more interest paid over the life of the loan.

How can you avoid ending up ‘underwater’ with negative equity? The easiest way is to have a larger down payment, typically at least 20%. Factors such as depreciation and interest rates weigh heavily on how long it takes to pay down an auto loan. 

Use this car depreciation calculator to see how quickly particular models are likely to lose value over time. It’s better to be informed than to be in over your head with auto loan debt.

Track Used Car Prices Weekly

2023 used car price trends
Black Book market insights show that 2022’s price trends are continuing into 2023.

If you’re in the market for a car in 2023, it’s important to stay informed as both new and used car prices remain volatile. 

We track used car prices with weekly updates. 

Add this used car prices updates page to your bookmarks, especially if you’ll be shopping for a new ride in 2023!

Cars and Trucks With the Smallest Price Hikes in 2023. Shame On You Honda!

Cars and Trucks With the Smallest Price Hikes in 2023. Shame On You Honda!

We recently shared the 2023 models with the biggest price hikes. Now, we’re back with the cars and trucks with the smallest price hikes for the 2023 model year. I must say, there are some surprises here. We’ll start off by taking a look at the price trends for the 25 best-selling models in 2022. Unfortunately, Honda grabs the attention with some of the most anti-consumer price changes in recent memory.

Let’s dive in.

The 25 Best-Selling Cars in 2022 + Pricing For 2023

2023 car price trends for the best-selling cars in America

The table below shows 2023 pricing for base models and mid-spec trim options in an effort to provide more useful price comparisons. We’ve included how much the 2023 pricing has changed as a percentage.

Notice that two of the top-selling models actually have price decreases for 2023. And after years of demand outpacing supply, Tesla prices are holding steady. Still, the vast majority have MSRP increases between 3% and 10%. 

2023 Ford F-150 Price Increase

America’s best-selling vehicle is now a lot more expensive. The 2023 F-150 Lariat, the popular mid-spec truck, is now $8,440 more expensive. The F-150 Limited sees a similarly huge price bump, and now tops out at $85,950. Apparently the F-150 now has Super Duty pricing. The F-150 Lightning went from a $40,000 electric truck, to a $60,000+ EV.

Tesla Prices Remain Unchanged in 2023 (UPDATE)

Update January 16th, 2023: Tesla has slashed their prices by up to 20% for some models.

Tesla prices rose 25% from 2021 through early 2022. Now, prices haven’t changed since June 2022. In China, Tesla prices have actually fallen, leading to in-store protests from frustrated customers who bought a few days too soon. The Rear-Wheel Drive Model 3 does now qualify for up to $7,500 in federal tax credits. More on that here.

The Full Story: What’s in Store for Used Tesla Prices in 2023

Honda, What Are You Doing?!

It’s a frustrating trend, one that we hope Honda fans will speak out against. Honda clearly wants you to spend more in 2023. As with the CR-V, they’ve dropped the base Civic LX, effectively raising the entry-level Civic to $26,145 in 2023. It’s happening to the 2023 CR-V too. Honda eliminated the base LX trim, forcing a nearly $5,000 price increase for the entry-level CR-V.

At least Honda is offering several more options for those wanting a hybrid powertrain in 2023. The Sport, EX-L, Sport-L and Touring trims all come as hybrids. The 2023 Touring Hybrid starts at $38,985, which is $600 LESS than the 2022 Accord Touring.

Our Expectations For Car Price Trends in 2023: Car Prices Fall as Dealers Suffer

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The Cars, SUVs and Trucks With the Smallest Price Increases

lowest car prices in 2023

The Ford Escape Gets New Looks and Lower Pricing

The 2023 Ford Escape gets a complete makeover, and with it comes a new trim lineup. That makes price comparisons tricky, but like for like, the 2023 Escape’s pricing remains about the same. In fact, the 2023 Escape ST-Line is $1,000 cheaper than the outgoing 2022 Escape SEL, its closest analog. Higher trims of the 2023 Ford Explorer also see steady prices.

We can’t say the same about other Ford models. The F-150 is seeing prices go up by 7% to 17% in 2023, and the all-electric F-150 Lightning now costs about $20,000 more than it was originally priced.

Toyota Offers the Closest Thing to a Deal

Toyota Corolla prices have actually gone down in 2023 for the Hybrid LE as Toyota makes way for the new hatchback Corolla. The 2023 Corolla Hatchback SE starts at $24,060 with destination fees.The Camry and Highlander also saw very minor price increases, with prices going up by about 1% across trim levels.

The Nissan Altima Continues to Slip

Altima prices nudged up slightly, but that’s no surprise. Nissan’s Altima sales have been on the decline for years now. In 2019, Nissan sold 209,000 Altimas in the U.S. In 2022, Nissan sold 140,000 Altimas in the American market.

Where to Find the Deals in 2023

New car prices are trending ever higher, even as supply finally catches up to demand. So, where are the best car deals in 2023? Head on over to the used car market for lower prices. Used car prices have been falling for several months, and we expect this trend to continue. Here are some YAA resources to get you started on your journey:

The Latest Used Car Price Update (Weekly Updates)

Used Car Deals in 2023 – Prices Are Still Dropping

Our Updated Price Predictions For 2023

Looking for more? Search hundreds of 100% FREE guides here, and join us at the free YAA Community forum to connect with thousands of car buyers sharing the best deals and negotiation tips. We look forward to seeing you there!

Predictions for 2023: Car Prices Fall as Dealers Suffer

Predictions for 2023: Car Prices Fall as Dealers Suffer

What a year it has been. 2022 started with new and used car prices climbing to record highs, stubborn semiconductor chip shortages and a world at relative peace. As we wrap up the year and look forward to 2023, used car prices are tanking, new car inventory is rising, and global conflict has shaken everything from gas prices to automotive suppliers, in addition to affecting millions of lives. At YAA, we believe that knowledge is power, especially when it comes to car buying, selling and ownership experiences. Our very own Ray Shefska has these 5 predictions for 2023, inspired by over 40 years in the auto industry, and a keen eye for an auto industry undergoing profound change. Let’s dive in.

1. New Car Inventory Will Continue to Grow

As we head into 2023, new car inventory is the highest since May 2021. That was when the semiconductor chip shortage sprang out of pandemic shutdowns, throwing the automotive industry into a downward spiral. The latter half of 2022 saw automakers slowly but surely climb back from the brink of empty lots, but the recovery is still underway. Manufacturers can make more cars today than they could a year ago. (See the latest new car inventory numbers here.)

But it’s not just easing supply constraints giving us hope for more new car inventory. Consumers are holding back on discretionary spending, and in many cases, that includes shiny new cars. Others are simply getting priced out of the new car market as MSRPs continue to rise. Check out the biggest MSRP increases for the 2023 model year. 

As more cars are produced with fewer buyers on the market, new car inventory will grow in 2023. Those dealer lots won’t be so empty in six months’ time. 

2. Used Car Affordability Will Continue to Keep Sales Volume Down 

used car price predictions for 2023

Even though used car prices are falling, used cars will remain unaffordable for many. From early 2021 to mid-2022, used cars became so absurdly overvalued that even with 5-10% price drops in recent months, they still have very far to fall before prices are anywhere near historical norms. Lower prices and reduced dealer profit margins will be unable to overcome higher loan interest rates enough to offset affordability.

Dealers are making less money with each used vehicle sold, and they’re going to be doing their very best to squeeze every additional dollar out of used car sales, even as we transition from a seller’s market to a buyer’s market.

3. Rising Interest Rates Will Lower Demand and Worsen Affordability

auto loan interest rates 2023

Interest rates for auto loans have doubled since 2021. As of late December 2022, the average used car loan APR was close to 10%, while used car loan APRs averaged 5%. Just how much does a bump up from 5% to 10% APR matter? Let’s run through some frightening math.

According to data from Experian, the average amount financed reached $41,665 for new vehicles and $28,506 for used vehicles in the third quarter of 2022. Let’s meet halfway at $35,000. 

At 5% APR with a 72 month loan (we suggest sticking to 60 months or less), total interest paid comes out to $5,584. At 10% APR, this same loan will charge the borrower $11,685 in interest. Cars get a whole lot more expensive when taking the cost of borrowing money into account.

The Federal Reserve has indicated additional interest rate hikes are likely, although they could be smaller than the most recent 50 basis point increase. In a best case scenario, auto loan interest rates could peak at some point later in 2023.

4. Manufacturer Incentives Will Increase

Simply put, auto manufacturers will be looking for more ways to drive up demand for their new cars in 2023. It doesn’t take a genius to see that the easiest way to do that is to lower prices, especially following month after month of MSRP hikes. 

Analysts at Cox Automotive found that the average incentive spend in November 2022 was $1,066, a 43% decrease since November 2021. Who will offer incentives first, the dealer or the manufacturer? We think 2023 will bring a bit of both as demand continues to soften.

We track the best new car incentives, updated monthly. Be sure to bookmark these pages if you’ll be in the market to buy or lease in 2023!

The Best New Car Deals Today

The Best Auto Loan Rates Right Now

The Best New Car Lease Deals This Month

5. Cash Is King in 2023

All-cash car purchases are expected to climb to levels not seen in decades this year. It’s all about interest. Borrowing money is so expensive right now that a cash purchase is by default preferred by money-savvy consumers. Others are financing with the dealer to get a better trade-in value, only to pay off the loan weeks later. But there’s another dynamic at play here. 

The post-pandemic economic recovery has been characterized by a new phenomenon that some economists are calling a ‘k-shaped recovery’. Essentially, some Americans are doing better financially now than ever before. They were fortunate enough to stay employed in 2020-2021, and with a whole lot less to do (and spend money on), their bank accounts are looking healthy. Others are still struggling to get back to where they were financially before COVID. 

The result of the ‘k-shaped recovery’ can be seen in 2022’s healthy luxury sales, despite a shaky economy. 

A Buyer’s Market in 2023?

used car price predictions
Used car prices began to drop in 2022. We expect this to continue in 2023. Source: Cox Automotive

Taken together, does this mean it will be a buyer’s market in 2023? With interest rates soaring to levels not seen in over a decade, it’s not the type of buyer’s market we’d like to see, but it’s an improvement. 

The good news is that in 2023, car buyers will have more negotiating power than in 2022. And we’re here to help! From hundreds of free resources to the new Deal School 3.0, 1:1 consultations, and exclusive discounts on everything from extended warranties to service at the shop, we’re growing YAA to get better at what we do best: saving you money. 

Not sure where to start? Check out these no-strings-attached free guides:

Car Buying Cheat Sheet: Former Dealer Shares How to Negotiate Car Prices Confidently

How to Challenge Forced Front-End Add-Ons At a Dealership

The Best (and Worst) Electric Cars in 2023

The Car Buyer’s Glossary of Terms, Lingo, and Jargon

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What do you think? What surprises are in store for vehicle ownership in 2023? Please, share your thoughts below!

What’s in Store for Used Tesla Prices in 2023

What’s in Store for Used Tesla Prices in 2023

January 2023 Update: Tesla slashed prices for new models by up to 20% overnight. The top-selling Long Range Model Y dropped from $65,990 to $52,990. This means that not only are all Teslas cheaper now, but most Model 3 and Model Y spec options are now eligible for the $7,500 EV tax credit in the U.S., at least until March when more detailed eligibility requirements are to be released by the government.

Lower new Tesla prices will immediately hit used Tesla prices hard. With these changes, in 2023, expect used Tesla prices to be at least 20% lower than they were in 2022.

Now, on to the original article.

Used car prices have fallen over 25% in 2022, and have a lot further to fall. Generally, used electric car prices have been reluctant to drop, at least compared to the steep declines seen in other vehicle classes such as luxury SUVs, crossovers and compact cars. The picture is different for used Tesla prices heading into 2023. Long the best-selling EVs by raw numbers and market share (more on that here), Tesla became the darling of auto market speculation in 2022. Thousands of Tesla buyers flipped their new cars for a profit on the used car market just weeks to months after taking delivery.

In 2023, used electric car prices are in for a rude awakening. Here’s where things stand today, and where prices are headed in the near future.

Used Tesla Prices Plummet

used tesla prices in 2023 (source: Reuters)
Edmunds data shared with Reuters shows Tesla prices dropping quickly. Source: Reuters

According to Edmunds data shared with Reuters, used Tesla prices were down 17% in December for the July peak. In July, the average price of a used Tesla was $67,297, but six months later the average price had fallen to $55,754. It’s all about perspective here: the overall used car market dropped 4% at the retail level during the same period, and wholesale prices dropped much more, as you can see here.

Used Teslas are sitting on dealer lots for much longer these days. In November, used Teslas sat on dealer lots for 50 days before selling on average, compared with 38 days for all used cars.

Who would’ve guessed it? Tesla cars couldn’t remain appreciating assets forever. “You can’t sell your current Tesla for more money than you paid for it, which was true for a lot of the past two years,” said Karl Brauer, executive analyst at car sales website iSeeCars.com. 

Tesla Inventory and Days to Sell Rising

As we approach the new year, there are 1,085 used 2022 model year Teslas for sale on YAA Car Search. A third of these nationwide listings have less than 5,000 miles on the odometer. In fact, roughly one third of ALL used Tesla listings are 2022 models. More noteworthy is how long used Teslas are remaining on the market. 

As recently as July 2022, analysts at iSeeCars found that the Tesla Model Y was the fastest-selling used car in the United States. The Model 3 and Model X were #5 and #6 on the list, right behind the Toyota Prius hybrid and the all-electric Ford Mustang Mach-E. It was a time of record gas prices, and electric mobility was very appealing. 

used Tesla prices June 2022
The fastest-selling cars in June 2022 – iSeeCars

Fast forward to the last days of 2022, and 69 percent of the 5,800 used Teslas on the market nationwide have been listed for greater than 38 days, the overall industry average. Nearly 40 percent have been listed for sale for over 90 days.

We compiled data from YAA Car Search for six of the best-selling electric vehicles in America:

used Tesla days on market, 2023

As you can see above, the Model 3 and Model Y have a higher proportion of listings that have been on the market for over 90 days than other popular EVs. Notably, 38 percent of used 2022 Tesla Model 3s and 40 percent of used 2022 Model Ys have been on the market for over 90 days.

What changed? Well, where do we start? Gas prices fell, interest rates doubled and fears of economic recession reverberated through consumer thinking in the latter half of 2022. Top that off with the omnipresence of Elon Musk in the news cycle, and you have a recipe for declining demand for Tesla cars, at least among enough car buyers to make a difference in sales trends. 

Tesla Flippers Out of Luck

And then there were the flippers. Tesla flippers made good money for a while. Wait times were between two and six months for factory-ordered Tesla EVs. Flippers would order a brand-new Tesla from the factory (often paying cash), with the intention of selling for a premium to an impatient buyer weeks if not days after taking delivery. The LA Times featured once successful Tesla flippers in this fascinating story.

The Tesla flippers flooded the market with gently used Teslas, the buyers vanished, and we’re left with plummeting prices for used Teslas. 

Used Tesla Prices in 2023

2023 Tesla Model Y

These are the biggest factors that will influence used Tesla prices in 2023:

  • Interest rates
  • Gas prices
  • EV tax credits
  • The competition (quality AND quantity)

We recently took a deep dive into why our auto experts think used car prices will continue to decline in 2023. Historically, Tesla has bucked the mainstream trends, but that era may have come to a close. Here’s a summary of what our team expects 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 10%, while used car loan APRs average under 5%.
  • 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.

We expect used Tesla prices to soften in 2023, especially when considering yet another factor, revised EV tax credits. More on that below.

Tesla Tax Credits Return, With a Catch

The Inflation Reduction Act of 2022 replaced the original EV tax credit in place since 2009 with new rules and eligibility requirements. These are the biggest changes taking effect in 2023 for new EVs:

  • The 200,000 sale cap is replaced with an expiration date of December 31, 2032.
  • The tax credit is back for Tesla, GM, Toyota and all other EV automakers, but only if strict requirements are met.
  • New vans, SUVs, and trucks with MSRPs up to $80,000 qualify. Sedans priced up to $55,000 MSRP qualify.
  • The tax credit will remain at $7,500, however it is now divided into $3,750 for battery mineral sourcing and $3,750 for battery component sourcing.
  • Final assembly must be in the United States, Canada or Mexico as soon as the bill is signed into law.
  • The EV tax credit is income-limited to individual tax filers with adjusted gross incomes of $150,000 or less, and joint filers with incomes of $300,000 or less.

There’s now a used EV tax credit, but before you get too excited, the used EV tax credit has the following eligibility requirements in 2023:

  • Used EVs would now be eligible for a $4,000 federal tax credit, with a price cap of $25,000. Used EVs must be at least two years old, and the used credit can only be claimed once in the life of the vehicle.
  • Tax filers can claim only one used EV tax credit every three years.

Used Tesla prices have fallen, but they’ll have to fall a whole lot more to approach the $25,000 price cap. Barring an astonishingly severe downturn, used Teslas won’t qualify for the used EV tax credit in 2023. 

New Tesla Models Again Eligible

2023 Tesla Model 3

In addition to higher interest rates, rising competition, a flooded market and general economic worries, consumer demand for used Tesla cars will decline further simply because brand new Teslas will again qualify for EV tax credits, for the first time since 2019. Of course, they’ll have to fall under the strict price caps of the new law. Few buyers will want to pay over $50,000 for a used Tesla Model 3 when a brand-new one could be had for less with the new tax credit. This continues in 2024, when the EV tax credit becomes a point-of-sale rebate.

Tesla Depreciation Data

Car Edge provides depreciation forecasts for Tesla models using real market data. The graph below shows expected depreciation for the Tesla Model Y over the next decade.

Tesla Model Y depreciation

See Tesla cost of ownership and depreciation forecasts at caredge.com

Negotiate Used Tesla Prices in 2023

Now more than ever, you CAN negotiate used Tesla prices. Floorplanning costs are high, meaning that car dealers are paying more each day that a used Tesla sits on their lot. With YAA Car Search, you can see exactly how long a car has sat on the lot, and then use that information as leverage to negotiate lower prices.

Take one look at our YAA member success stories, and the value of negotiating is clear. When you learn how to effectively negotiate car prices, you open the door to THOUSANDS of dollars in savings. At a time when auto loan interest rates are climbing ever higher, saving a few thousand dollars on a deal translates to even greater savings in financing costs over the long-term. 

We know that negotiating can be a challenge, but we believe it’s a challenge worth overcoming. That’s why we created Deal School 3.0, the ultimate online course in car buying. Deal School was created with one audience in mind: car buyers like you. Plus, it’s updated for 2023! Looking for even more savings? Compare the full range of benefits available to our members

We love free stuff as much as the next guy. Check out these 100% free, no-strings-attached car buying guides. If you love these, you’ll love what you get with YAA+!

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