CoPilot’s Return to Normal Index

July 2023 Report

EXECUTIVE SUMMARY: JUNE 2023 DATA

CoPilot’s Return to Normal Index measures the differential between what any used car price would have been today if not for the extraordinary dynamics of the past two years, versus how much it is actually worth now, at retail. As it tracks this differential over time, the Return to Normal Index provides the only real-time barometer of the used car market’s recovery, as well as how close individual vehicle segments, brands, and age brackets are to returning to normal pricing levels.

As of July 1, 2023, CoPilot’s Return to Normal Index found that used car prices have fallen for the first time in five months, as consumer demand for used cars finally slowed, after seeing significant price increases in the earlier part of 2023.

• Throughout early 2023, as new and used car inventories struggled to keep up with demand, this drove up prices in the used car market, and manufacturers responded by producing more new vehicles.

• As supply rebounded in recent months, consumers who had been waiting to make a purchase bought new cars, rather than used, keeping prices for both hovering near record high prices.

  • As a result, demand has finally started to cool in the used car market, particularly among the most expensive vehicles that drove the increases in the used car market in early 2023.

• Used cars were listed at an average price of $31,969 in June, falling by $66 since May. 

  • Between January and May 2023, used car prices had increased by a total of $1,628 (or 5%) before reversing course this month.

• On average, used cars now have a Price Premium of $8,037 (or 34%) above projected normal levels.

  • This amounts to a slight decrease in Premium (by $75) since May, when the Premium was $8,112 (or 34%) – an early indication that Premiums may be peaking as well, which predicts further price drops ahead.

• Nearly-new (1-3 year old cars), which had seen the most substantial price increases among all age brackets (up 4% between January and April 2023), fell by nearly $500 in June.

  • Their Premium also dropped by 5% since May, as these vehicles become more affordable in relative terms amid slowing consumer demand. This is because, as supply in the new market replenished in early 2023, more consumers began buying new cars instead of the nearly-new vehicles they had relied upon as substitutes during ongoing inventory shortages.
  • Meanwhile, preowned (4-7 year old) and older (8-13 year old) cars continue to show steady price declines. Sales of these vehicles declined in June, as inventory shortages persist, and interest rate increases and tightening lending standards are putting these traditionally more affordable vehicles out of reach for many consumers.

• Used minivans are showing the most dramatic price increases among all vehicle segments, up by $1,563 (or 7%) since February, as inventory has dropped and supply remains limited. Their Premium has also followed suit, up by a massive $18,362 (or 33%) since February, indicating these prices are unlikely to drop yet.

  • Used SUVs and used pickup trucks – both of which had seen significant price increases earlier in 2023 – both fell in price for the first time this year. These two segments remain the two closest to returning to normal pricing levels, priced at 25% and 28% above projected normal levels, respectively.

• Used Teslas, and used electric vehicles overall, continue to show substantial declines, both down 13% since gas prices reached record highs last summer.

  • In May, used Teslas were the first brand to reach normal levels – and their Premium continued to decline in June, with the popular EV make now priced $6,484 (or 12%) below historically normal levels. Since last June, its Premium has fallen by a massive $30,838, driven down by aggressive discounting of new Teslas, and making used Teslas the best value cars on the market.

• While all vehicle brand types saw a decline in Premium in June, used luxury vehicles saw the most substantial decreases, down by $577 (or 6%) since May.

PRICE PREMIUM BY VEHICLE AGE

• In June, nearly-new (1-3 year old cars) were listed at an average price of $40,535 – a decline of $463 (or 1%) from last month.

  • While nearly-new sales increased by 5% month-over-month, inventory was able to keep pace, increasing by 7%, paving the way for dealers to continue to lower prices for vehicles in this age bracket.
  • The Premium for this age bracket was $10,062 (or 33%) above projected normal levels – an decrease of $550 (or 5%) since the previous month.
  • In the three month period between January and April 2023, nearly-new cars had increased in price by $1,653 (or 4%). Since then, they have declined by a total of $756 (or 2%) in the past two months.

  • Nearly-new car prices peaked in June 2022 at a record high of $42,333.

  • Year-over-year, they have declined by $1,798 (or 4%).

  • Their Premium also peaked in June 2022, at $12,784 (or 43%) above projected normal levels, and in the past year, has fallen by $2,722 (or 21%).

• In June, preowned (4-7 year old cars) had an average listing price of $28,500, a $242 decrease from May, and down $498 from April.

  • Between January and April 2023, preowned car prices showed slight increases (up $181), before reversing course and starting to drop in price again.
  • In June, the Price Premium for pre-owned cars was $7,417 (or 35%) above projected normal levels. This represents a $92 decrease in Premium since April, when this age bracket was priced $7,509 (or 35%) above projected normal levels.

  • Year-over-year, preowned car prices have fallen by $1,474 (or 5%) since June 2022.

  • Their prices peaked in January 2022, at $31,246.

  • Since June 2022, the Price Premium for preowned cars has fallen by $1,503 (or 17%), from $8,920 (or 43%) above projected normal levels.

• In June, older (8-13 year old) used cars had an average listing price of $17,313, an $85 decrease from May.

  • In the first half of 2023, older used car prices have slowly and steadily declined, peaking for the year in February at $17,727, and falling by a total of $354 in the subsequent five months.
  • The Price Premium for older used cars in June was $4,665 (or 37%) above projected normal levels, down by just $8 from May. 

  • Since June 2022, older used cars have fallen in price by $791 (or 4%). 

  • Their prices peaked in April 2022, at $19,260.

  • Year-over-year, their Premium has fallen by $1,065 (or 19%), from $5,530 (or 44%) above projected normal levels in June 2022.

PRICE PREMIUM BY TYPE OF VEHICLE

• SUVs: In June 2023, used SUVs were listed at an average price of $43,525, down by just $26 since May, but dropping in price for the first time in 2023.

  • As these vehicles hover near peak prices, sales volumes finally slowed this month (up just 2% from May to June, following a 15% total increase between February and May) – potentially indicating consumers are reaching their limit for paying near-record high prices for some of the most expensive vehicles on the market.
  • Before reversing course and falling this month, used SUVs showed substantial price increases between January and May, up $3,400 (or 8%) in that five-month period.
  • At $8,691, the Price Premium for used SUVs is now 25% above projected normal levels. This represents a $286 (or 3%) decline in Premium from May, when used SUVs were priced $8,977 (or 26%) above projected normal levels. A falling Premium indicates these prices are more likely to drop further.

  • Used SUVs continue to be the segment closest to returning to normal levels. Year-over-year, its Premium has declined by $813 (or 9%).

  • However, in absolute terms, used SUV prices have essentially held flat over the past year, up by $9 since June 2022.

• Minivans: In June 2023, minivans were listed at an average price of $25,092, an increase of $144 since May.

  • Used minivans have increased steadily in price since February of this year, up by a total of $1,563 (or 7%) in the past four months.
  • The Price Premium for used minivans was $7,464 (or 42%) above projected normal levels. Over the past four months, this Premium has increased by a staggering $1,832 since February’s $5,632 (or 32%), indicating that prices are unlikely to fall any time soon for these in-demand cars.
  • Year-over-year, minivan prices have fallen by just $281, while their Premium has fallen by just $26 since June 2022 – indicating this popular segment continues to remain stubbornly unaffordable for many consumers, with monthly sales soaking up all available inventory.

• Pickup Trucks: In June 2023, the average listing price for used pickup trucks was $41,327, down by $140 since May.

  • After increasing steadily in price between February and May 2023, up by $1,799 (or 5%), this marks the first month this year in which used pickup prices declined. 
  • Similar to the trend seen in used SUVs, while used pickup truck sales had jumped by 8% between February and May, they slowed to an increase of 1% between May and June.
  • In June 2023, the Price Premium for used pickup trucks was $8,999 (or 28%) above projected normal levels – a $637 (or 7%) decrease since May, suggesting prices may fall from here.
  • After used SUVs, used pickup trucks remain the segment second-closest to returning to normal levels, on a percentage basis.
  • Year-over-year, used pickup truck prices have fallen by just $81 in absolute terms, though their Price Premium has declined by $313 (or 3%) since June 2022.

PRICE PREMIUM BY FUEL TYPE

• In June 2023, used Teslas prices are now listed at an average of $46,166, down another $1,107 (or 2%) since May. Since Tesla first announced price cuts in late December 2022, prices have fallen by a total of $7,141 (or 13%), and in the past year, they have fallen by $24,955 (or 35%).

  • Last month, used Teslas were the first brand to finally reach normal, pre-COVID pricing levels – and their Premium has continued to see significant declines, currently priced at $6,484 (or 12%) below projected normal, making used Tesla’s the best value on the market.
  • Since the Premium for used Teslas peaked in July 2022 (along with gas prices) at $24,534 (or 53%) above projected normal levels, it has since declined by a staggering $30,838 in the past year.

• In June 2023, used electric vehicles had an average listing price of $44,160. This represents a decline of $1,109 (or 2.5%) since May.

  • Since gas prices reached record highs last summer, used electric vehicles have been on a steady decline as demand slowed. Since June 2022, they have fallen by a staggering $23,245 (or 34%).

  • Furthermore, as the impacts of the price cuts to new Tesla models that started in late December 2022 continue to ripple through the market, used electric vehicle prices have fallen by $6,789 (or 13%) during this year alone – on par with the rate at which used Tesla prices are falling.

• In June 2023, used hybrid vehicles were listed at an average price of $31,182, representing a decrease of just $146 (or 0.5%) since May. Year-over-year, they have fallen in price by $5,899 (or 11%).

PRICE PREMIUM BY BRAND

Domestic Brands:

• In June 2023, high-volume domestic brands had an average Price Premium of $8,480 (or 35%), above projected normal levels.

  • The Premium for domestic brands decreased in May, down by $131 (or 2%) since May.

• In June, used Dodges had the highest Price Premium among domestic brands, listed at $3,646 (or 15%) above projected normal levels. They were closely followed by used Fords, which had a Price Premium of $3,416 (or 12%), above projected normal levels.

Foreign Brands:

• In June 2023, the Price Premium for high-volume foreign brands averaged $6,657 (or 36%), above projected normal levels.

  • This represents a $43 (or 0.6%) decline in Premium since May.
  • In June, among foreign brands, used Toyotas had the highest Price Premium, listed at $3,628 (or 14%) above projected normal levels.
  • They were followed by used Volkswagens and used Kias, whose June Premiums were $3,462 (or 17%) and $3,450 (or 18%), respectively.

Luxury Brands:

• In June 2023, the Price Premium for luxury used car brands was $8,942 (or 29%) above projected normal levels, a $577 (or 6%) decrease from last month.

  • Used Genesis vehicles had the highest Price Premium in this category, for the second month running, listed at $7,302 (or 19%) above projected normal levels.
  • They were followed by used Cadillacs and used Mercedes-Benz, which had Price Premiums of $5,210 (or 15%) and $5,006 (or 12%), respectively.

METHODOLOGY

CoPilot is a leading car buying app that provides consumers with an expert partner for high-consideration purchases, starting with car buying and ownership. The platform combines massive real-time data with a winning combination of human expertise and AI-powered search to introduce transparency to the shopping, purchasing and ownership journey. The mobile application takes the time, frustration, and guesswork out of the process, empowering people to easily navigate the risks of shopping for high-value items, and to buy with confidence at the right price and the right time.

CoPilot provides free AI-powered search and pricing tools for consumers. CoPilot’s AI-powered discovery tool provides car comparisons and model recommendations. The CoPilot plugin is the first to rank and return real-time listings within ChatGPT’s chat interface. Price Pulse makes it easy for car shoppers to check the current market value and Price Premium for any car, helping them to know what and when to buy, sell or trade-in, using the same data only dealers used to have.

For media publishers, CoPilot offers free, embeddable data tools, including Price Pulse market trends, allowing journalists and bloggers to integrate interactive charts and tables within their web content, apps, or newsletters, powered by CoPilot’s unique data and analytics. Follow CoPilot on Twitter here for original data and insights.

View the press release on this month’s Index report findings here.

Media Contact:

Kerry Close

kclose@groupgordon.com

732-609-2644