Used car prices have fallen sharply over the past year, led by the Tesla Model 3, according to new analysis from iSeeCars.
Overall used car prices are down 4.7% from September and 8.7% from a year ago, according to the analysis, which is based on the average listing prices of over 1.8 million 1-5-year-old used car sales in Feb. 2022 and 2023—not necessarily the final selling price.
Based on that data set, average used Model 3 prices are down 21.5% since Sept. 2022, making it the used car that has taken the steepest pricing nosedive in the past six months. The Tesla was also in the top five vehicles was also in the top five for year-over-year price declines, with asking prices down 19%.
2022 Tesla Model 3
The Nissan Leaf, Toyota Prius Prime, and Hyundai Ioniq Hybrid were also among the used vehicles that saw the biggest decline in average prices year-over-year. Oddly, the Leaf is on both the list of models with the greatest decrease over the past six months and the list with the greatest increases over the past year. That may be a good indication of just how volatile the market has been.
EVs overall saw an average 13.9% decrease in used prices between Feb. 2022 and 2023, while hybrids saw a 2.1% drop, according to the analysis. Altogether, it's a signal that the EV market has truly come down from 2021, when used EV prices surged, while varying widely by model and region.
2020 Tesla Model 3
Several reports out early last fall suggested that the used EV market had peaked in the summer months. Now we're seeing even more evidence that the US EV market is dropping, possibly related to demand, interest rates, and more. As J.D. Power observed, the prices of long range EV models appeared to better hold their value on the used market during this decline.
In the case of the Model 3, Tesla's huge price cut in January probably played a role in the pricing downturn for used models. But for the Model 3, and probably the Model Y soon, the nosedive in used values represents a market settling back closer to normal, after a bizarre situation that for a time, left used Teslas nearly the same price as new Teslas.