July 13th, 2023 2:00pm PDT
According to the latest government data on inflation, used car prices are showing signs of stabilization and slight decreases, reaching levels slightly higher than those seen before the pandemic. Notably, the prices of used electric vehicles (EVs) are experiencing an even more rapid decline.
A recent report by iSeeCars.com in June 2023 reveals a significant decline in used EV prices compared to the overall used car market. The data highlights a nearly 30% drop in used EV prices over the past year. Moreover, the rate of price decreases has been accelerating, starting at 8.8% in January and rising to 16.8% in March before reaching as high as 29.5% in June. These findings were obtained through an analysis of over 1.8 million transactions involving used cars aged between one and five years, spanning from June 2022 to June 2023.
According to iSeeCars executive analyst Karl Brauer, there has been a significant shift in the supply and demand of EV’s. Previously, used EV prices were increasing at a faster rate compared to the average used car. However, the current trend indicates that EV prices are now dropping almost ten times faster than the average used vehicle. This suggests a change in the market dynamics for electric vehicles.
In contrast, iSeeCars.com has reported that the used car market is starting to stabilize. In June, there was a year-over-year decline of 3.6% in overall prices, which continues the downward trend from previous months. Specifically, May saw a decrease of 2.9%, and April experienced a 3.6% drop in prices.
The Effect of Tesla’s Affordability
The significant decrease in prices of used electric vehicles (EVs) can mainly be attributed to Tesla’s (TSLA) substantial price cuts earlier this year. These reductions had a significant impact on the used EV market, particularly because Tesla EVs such as the Model 3 and Model Y dominate it.
Brauer, an executive analyst at iSeeCars.com,, explains that the decline in prices of new Tesla models has had a direct impact on the value of used EVs. Given that Tesla holds a significant portion of the used EV market, the considerable decrease in Tesla values has consequently influenced the entire category.
There are other factors that have contributed to the decrease in prices in the second-hand EV market. For instance, stabilizing fuel prices throughout the year have reduced the demand for EVs. The rise in interest rates has also played a role. Furthermore, price-conscious shoppers who are looking for good deals on vehicles, regardless of their powertrain, have further driven down prices.
When examining the data closely, it becomes clear that out of the top 10 models with substantial price reductions, six of them were hybrid or electric vehicles. Interestingly, Tesla had three models within the top five positions. The Model 3 experienced a significant drop of 30.5% in price, followed by the Model X with a decline of 21.3%, and the Model S with a decrease of 19.0%.
On the other hand, traditional gas-powered vehicles saw the most significant price increases in the used car market. Models such as Mercedes-Benz SL convertibles, Fiat 500X crossover, Chevrolet Suburban, and two Porsche sports cars – the 911 convertible and 718 Cayman coupe – experienced substantial overall price hikes.
When analyzing various metropolitan markets in the United States, it becomes evident that Miami experienced the most significant decline in used car prices. In June, there was an 8.1% drop compared to the previous year. Following closely behind is New York with a 6.9% decrease and Jacksonville, Florida, showing a 6.8% decrease. Out of the 50 metro areas included in iSeeCars’ analysis, only Dallas, Salt Lake City, and San Antonio saw an increase in used car prices.
If you’re in the market for a used EV, now might be a good time to consider purchasing a Tesla at a reduced price. Don’t limit your search to local options; exploring possibilities in other states like Florida or New York could lead to better deals on Tesla vehicles.