Used car prices are collapsing

24/7 insights

• • Used car prices started to fall significantly at the beginning of 2024.
  • Prices were at a level during the pandemic, when chip shortages led to low vehicle production.
  • There are some surprising vehicles on this list that you might think are better value.
  • Also: 2 dividend legends to be kept forever

When you consider the auto market and the roller coaster ride of the past four years, it should come as no surprise to learn that the used car market is in decline. Unfortunately, this has two immediate effects, as car owners can no longer sell their vehicles for more than they are owed, and customers can now buy used cars much more cheaply than a few years ago.

Conformable The Kobeissi letter on X (formerly Twitter), the used car market is officially here. The group’s commentary indicates that used car and truck prices have now fallen far enough from their 2021 peak that we are in uncharted territory. Worst of all, there are no signs or indicators that prices will stop falling, which could have dangerous ripple effects for years.

Why is this important?

The price of used cars is a good indicator of the performance of the car market as a whole.

The automotive market is one of the most watched industries on the planet, and 24/7 Wall Street covers it frequently. Whether it’s new and used car sales or the transition to electric vehicles, we’ve got it all covered on this site. However, used car pricing is worth covering, especially as it affects many brands we discuss weekly, such as Ford, GM, Stellantis, Kia, Hyundai and others.

This is not 2021

In 2021, used cars could not be kept on the lot, but today they are available everywhere.

According to The Kobeissi Letter, the auto industry is looking at used car and truck prices falling 17.5% from 2021. Their research indicates this is the biggest drop in the market in 15 years. Worse, there have only been two instances in the last 35 years where prices have fallen more: 2004 and 2009, the latter a ripple effect from the collapse of the housing bubble. In 2021, the price of new cars averaged $37,000, but in 2024 that number is closer to $50,000.

Used car prices

The used car market has fallen dramatically over the past 22 months.

When you look at the used car market, overall prices have fallen over the last 22 months. This means more cars are sitting on the lot and car dealers’ profits are down, meaning they have less money to help create better deals. In June 2024, the auto industry saw wholesale prices decline by 8.9% annually to $17,934.

What’s worse is that electric vehicle manufacturers have been hit the hardest, with prices of some vehicles falling by more than 40%. Tesla is feeling the heat in a big way, as owners of cars like the Tesla Model Y and Tesla Model 3, which once held huge trade-in values, are now not even of interest to many dealers as trade-ins. Instead, you have to go through a private sale, a dramatic change from two years ago.

Keeping cars longer

People who keep cars longer significantly affect the price of used cars.

One scenario may not be considered here, but is worth discussing. This revolves around the fact that the average age of a car on the road in America is 12.6 years, an all-time high. As people keep their vehicles longer, their value decreases, influencing how much they can sell for when used as trade-ins or just sold for cash. In addition, more people are keeping cars past 160,000 miles thanks to extended warranties and better build quality that ensure they can last much longer than they have in the past.

10. Kia Telluride

The Kia Telluride is one of the best-rated SUVs on the market.

• Average price 2021: $39,000
• Average price 2024: $34,500
• Price drop: 11.5%

The Kia Telluride is considered one of the best SUVs for families, but that doesn’t mean it’s immune to falling used car prices. The biggest impact is likely a drop in demand when Kia had a waiting list for the Telluride during the COVID-19 pandemic. When demand stabilized and volume returned, there was an immediate effect on the price of used cars.

9. Subaru Outback

The Subaru Outback is one of the company’s best-selling vehicles.

• Average price 2021: $32,500
• Average price 2024: $28,200
• Price drop: 13.2%

Any enthusiasm Subaru may have had for the Outback’s big 2020 refresh has undoubtedly vanished. There’s no doubt that while Subaru may have gotten ahead of the game in 2020, four years later, the competition has not only caught up in features and interior refinements, but surpassed Subaru’s efforts. As a result, used vehicle prices are falling rapidly.

8. Jeep Grand Cherokee

The Jeep Grand Cherokee has surprisingly dropped in used car prices.

• Average price 2021: $41,000
• Average price 2024: $35,500
• Price drop: 13.4%

It’s hard to say exactly why the Jeep Grand Cherokee saw such a dramatic price drop, but one consideration is the introduction of the Grand Cherokee L, which made the brand’s two-row models somewhat obsolete. Stiff competition from the likes of the Ford Explorer, Hyundai Palisade, and Kia Telluride likely influenced demand for the Grand Cherokee and hurt used car prices.

7. Hyundai Elantra

The Hyundai Elantra is a fantastic budget-friendly compact sedan.

• Average price 2021: $22,000
• Average price 2024: $18,800
• Price drop: 14.5%

One of the smaller compact sedans on the market, the Hyundai Elantra has long been competing with the Honda Civic. With a redesign in 2021, earlier model years saw their prices drop dramatically, but the inclusion of the N Line and N models affected the 2021 model years and up. Hyundai has also focused on going electric, which has an impact on overall pricing across their range.

6. Nissan Altima

The Nissan Altima is having trouble keeping up with the Toyota Camry and Honda Accord.

• Average price 2021: $24,500
• Average price 2024: $21,000
• Price drop: 14.3%

The Nissan Altima has long been in a precarious position in the market. While it’s competitive with the Toyota Camry and Honda Accord on paper, it doesn’t have similar sales numbers. There have long been questions about reliability, and there have been very few major exterior and interior updates since 2019. Last but not least, Nissan is undoubtedly putting more emphasis on its compact SUV, the Rogue.

5. Toyota Camry

The price of the Toyota Camry has dropped dramatically over the past three years.

• Average price 2021: $27,800
• Average price 2024: $24,200
• Price drop: 12.9%

While the Camry had long been one of America’s best-selling cars, its existing bodywork was becoming outdated. On the contrary, the Hyundai Sonata was getting better and better, often at a lower price, which probably influenced Camry sales. Additionally, a complete exterior refresh in 2024 will undoubtedly have an impact on the overall price from previous model years.

4. Chevrolet Silverado

The Chevrolet Silverado has dropped in price since introducing a refreshed model.

• Average price 2021: $46,500
• Average price 2024: $40,200
• Price drop: 13.5%

In 2021, the Chevrolet Silverado was at the top of its used car market, but when Chevrolet introduced a refreshed model in 2022, it dwarfed every previous model year. Plus, you’ve got updated models from the Ram 1500 and Toyota Tundra, both vying for the top-selling Chevrolet spot behind the Ford.

3. Ford F-150

The Ford F-150 is still the best-selling pickup truck in the country.

• Average price 2021: $48,000
• Average price 2024: $41,500
• Price drop: 13.5%

While the Ford F-150 has long been America’s best-selling pickup truck, the introduction of the Ford F-150 Lightning has affected the price of gasoline-powered models. The lack of 2021 chips also had a big impact on the prices of the gas models, and with this problem solved, the second-hand market price of this pickup dropped accordingly.

2. Honda Civic

The Honda Civic remains one of the best-selling cars in America.

• Average price 2021: $25,500
• Average price 2024: $22,100
• Price drop: 13.3%

The introduction of a new model in 2022 has undoubtedly had an impact on one of the most popular economy sedans in the country. This introduction also improved fuel efficiency, which is appealing as long as gas prices remain high. However, it also influences the desirability of the used car model. There is also concern about the shift in consumers looking more towards SUVs.

1. Toyota Rav4

The Toyota Rav4 has fallen the most in used car prices.

• Average price 2021: $30,602
• Average price 2024: $26,935
• Price drop: 12%

As one of the most popular compact SUVs, the Toyota Rav4 has long been a winner for the Toyota brand. However, the supply chain issues that previously kept prices high for the 2021 used model have since been resolved. Additionally, a refreshed model in 2024 with new exterior styling will almost always make an impact on the used car market. On top of that, the introduction of the Toyota Corolla Cross finally started to cannibalize Rav4 sales starting in 2022.

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