In Cars Commerce’s most recent Industry Insights Report, industry and marketplace analytics principal David Greene noted the contrast between the steady used-car market with the relative volatility of the current new-car environment.
The report showed the average used-vehicle list price on the Cars.com platform (currently at $28,882) has been virtually flat throughout 2024, while the Cars.com New Car Price Index has been up and down during the same period.
So, why isn’t the used-car sector experiencing the same “adjustment” as new cars?
Greene said the stability of the used car market is being driven by a number of factors that have kept prices and consumer demand relatively consistent since the start of 2024.
“One contributing factor to this stability is the ongoing decrease in new car prices and used inventory shortages of late model year vehicles,” he explained. “That has led to a mix of older, higher-mileage vehicles becoming more prominent in the used car market, resulting in more accessible pricing for consumers.
“Although consumer demand saw a seasonal drop after Labor Day, searches per used vehicle have increased year-over-year by almost 3%, indicating sustained interest in the market.”
The result, Greene said, is “a more balanced market” that is attracting consumers who are balking at the cost of new vehicles.
“While prices have softened year-over-year — down almost 5% — as the market normalizes, the overall stability of the market offers consumers some affordability and a wider selection of vehicles,” he said.
The report also noted a huge percentage jump in demand for used electric vehicles, with searches for used EVs on Cars Commerce’s platforms up 32% year-over-year.
While that might sound like a monumental leap, Greene said “it is worth noting that used EVs still represent a small portion of the market, accounting for only about 2% of inventory and searches compared to internal combustion engine vehicles.”
Still, it is not insignificant as a sign of the used EV market’s continuing growth.
“Despite their smaller market share, the growing availability of used EVs suggests continued growth in this sector,” Greene said. “The rise in interest is primarily driven by a broader selection of inventory and lower prices, particularly for vehicles under $30,000. Additionally, more used EVs are starting to qualify for the federal used EV tax credits, further boosting demand.
“The average price for a used car is around $29,000, while the average used EV price is around $37,000. Though still more expensive, those interested in transitioning to EVs are finding greater affordability compared to the $63,000 average price for a new EV.”
Greene said Tesla’s dominance of the EV market extends into used cars, as the brand accounts for nearly half of both search share and inventory growth on Cars.com. But other brands, especially luxury brands such as Mercedes-Benz, BMW and Volvo, have also been strong contributors to used EV inventory growth.
“While the demand and inventory for used EVs are expanding, they still remain lightly used compared to other fuel types,” he said. “The average used EV is 2.8 years old with 30,0000 miles, significantly younger and less driven than the broader used car market average of 5.2 years and 61,000 miles.
“That is contributing to the stabilization of used EV prices, which have recently leveled off after notable declines for key brands like Tesla, Audi and Volkswagen over the past year.”
