Used Car Prices Fall in March, Demand Remains High for Affordable and Fuel-Efficient Vehicles

Summary:

• Used car prices in March increased an average of 30.4%, or $8,032 year-over-year, which is down from a 35.0% increase in February.
• The vehicles with the largest price increases are mainly economy and fuel-efficient cars, while the vehicles with the smallest price changes are luxury SUVs and sports cars.  
• Hybrid used car prices are up 40.5% and electric used car prices are up 36.3% amid a surge in gas prices.

“After coming down for the second consecutive month, used car prices remain elevated due to lingering supply constraints, and could rise again due to geopolitical factors as Russia is a key supplier of materials used to make car parts and microchips,” said iSeeCars Executive Analyst Karl Brauer. “We are also seeing a significant increase in demand for used hybrid and electric vehicles as a result of high gas prices, with the cost of hybrids increasing by 40.5 percent and electric cars increasing by 36.3 percent compared to last year.” 

Although the average used car has significantly increased in price, iSeeCars’s analysis also found some vehicles have lower-than-average increases, making them smarter buys for consumers in the market for a used car. “While these used models are still more expensive than last year, they haven’t been as drastically impacted by price hikes,” said Brauer.

Top 10 Used Cars With the Greatest Price Increases 

Five small gasoline cars make the list including the Kia Rio subcompact car, the Chevrolet Spark subcompact car, the Kia Forte compact car, the Kia Soul subcompact wagon, and the Mitsubishi Mirage subcompact car. “The Kia Rio, Chevrolet Spark, and Mitsubishi Mirage subcompact cars are among the lowest-cost vehicles on the market, while the Kia Forte and Kia Soul are among the lowest-priced options in their respective vehicle classes,” said Brauer. “These vehicles, priced at $20,000 and below, are attainable for new drivers and those looking for affordable transportation, even after their large increase in price over the past year.”

Two electric cars make the list, including the Nissan LEAF and the Tesla Model S. “The Nissan LEAF’s price increase is likely due to the surge in gas prices as well as the heightened desirability for the redesigned 2018 model, which benefited from increased range and is now coming off lease to enter the used car market,” said Brauer. “Meanwhile, demand for used versions of the Model S waned in recent months as consumers embraced the more affordable Model 3 and the Model X SUV. But with the recent upgrades to the Model S, plus the new ‘Plaid’ model and higher fuel prices, demand has increased for the Model S.”

The Mercedes-Benz G-Class rounds out the list. “The wait time for a new version of the Mercedes-Benz G-Class is over a year, so buyers who want this opulent off-roader are turning to the used car marketplace,” said Brauer.

Used Car Price Increases By Bodytype and Fuel Type

Top 10 Used Cars With the Smallest Price Changes 

Three pickup trucks make the list including the second-ranked Nissan Titan XD, the seventh-ranked Honda Ridgeline, and the eighth-ranked Nissan Titan. “The Nissan Titan and its XD heavy-duty-ish model are the slowest-selling trucks in the full-size segment, and the Honda Ridgeline is among the slowest-selling in the compact segment, reflecting low demand in the used car marketplace,” said Brauer. 

Three sports cars round out the list including the Chevrolet Camaro, the Mazda MX-5 Miata RF, and the Ford Mustang. “Sports cars were among the vehicle segments that saw the earliest price increases during the pandemic, so their year-over-year price increases aren’t as dramatic as other vehicle segments because prices were already high in March 2021.”

Used Car Price Increases by City  

Why Are Used Cars So Expensive? Chip Shortage Explained

And it’s not just used cars that are experiencing price hikes. New car prices have risen too, with the average brand new car transacting above sticker price. Car companies have also slashed incentives due to the shortage of new cars, which has elevated the average price paid for new cars and caused buyers to pay over MSRP. Moreover, the Russia/Ukraine conflict is expected to further elevate new vehicle prices as Russia is a key supplier of nickel, palladium, and aluminum, all of which are required for vehicle production.

“While consumers were previously advised to wait to purchase a used car if they were able to do so, new geopolitical factors are expected to exacerbate and prolong the present used car price increases,” said Brauer. “The best way for American consumers to avoid significantly higher prices while car shopping for the foreseeable future is to either maintain their current vehicle or purchase a used vehicle that isn’t in high demand, and to be as flexible as possible with factors such as color and trim.”

More from iSeeCars.com:

• Best Electric Cars
• Best Hybrid Cars
• Best Midsize SUVs

iSeeCars.com analyzed over 1.8 million 1-5 year old used car sales in March 2021 and 2022. The average listing prices of each car model were compared between the two time periods, and the differences were expressed as both a percentage difference from the 2021 price as well as a dollar difference. Heavy-duty vehicles, low-volume vehicles, vehicles discontinued as of the 2022 model year, and vehicles with fewer than 4 of the 5 model years for each period were excluded from further analysis.

About iSeeCars.com

iSeeCars.com is a car search engine that helps shoppers find the best car deals by providing key insights and valuable resources, like the iSeeCars free VIN check reports and Best Cars rankings. iSeeCars.com has saved users over $332 million so far by applying big data analytics powered by over 25 billion (and growing) data points and using proprietary algorithms to objectively analyze, score and rank millions of new cars and used cars.