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Study: Tesla Model 3 Is Vehicle With Biggest Used Car Price Drop

Used car prices have finally started to drop. Interestingly, the Tesla Model 3 leads with the biggest drop.

A new study by researchers at iSeeCars shows that used car prices are finally starting to head back to ward some price normalcy. The overall summary from Karl Brauer, Executive Analyst at iSeeCars is, “The inflation and high-interest rates of the past several months are clearly impacting consumers, and have migrated to the car market where prices are consistently falling.” We find it intriguing that the model with the biggest decline is the very popular Tesla Model 3. As recently as August of 2021, we reported that the Tesla Model 3 was the fastest-selling used car in America.

Related Story: Tesla Drastically Reduces Prices of (New) Model 3 in the U.S. Up to a 23% Drop

The study looked at price levels in September of 2022 compared to those paid by shoppers in December 2022. Over that three-month span of time, the Tesla Model 3 saw the single largest decline in valuation, which translates to about $9,000 less in price for the used car consumer. “The pricing shifts since September show which models have taken the biggest hit in recent months, such as the Tesla Model 3 losing nearly 17 percent of its value, and the Nissan Kicks, Ford Mustang, and Hyundai Ioniq Hybrid all down over 10 percent,” said Brauer.

Used car trend chart Tesla Model 3 by iSeeCars

The researchers also looked back one year to see how the trends looked. From December 2021 until December 2022, the Tesla Model 3 is still among the vehicles with the highest used car price decline, with an 11.6% drop over that longer period. Mr. Brauer noted that “Cars like the Chevrolet Camaro, Ford Mustang, Mercedes-Benz G-Class, and Tesla Model 3 were commonly leading the price hikes at the height of pandemic pricing, with people willing to pay whatever it took to get one.”

Used car trend chart by iSeeCars

While the one-year trend shows a very large reduction in the value of the Tesla Model 3, it is not a trend that the green vehicle segment is seeing overall. Among the used vehicles with the largest one-year price gains in value are the Honda Accord Hybrid, Toyota Prius Prime plug-in hybrid-electric vehicle, RAV4 Hybrid, Camry Hybrid, along with the Nissan Leaf and Chevy Bolt battery-electric vehicles. It is apparent from the data that used car shoppers are still very interested in vehicles with reduced emissions and lower fuel usage. They are just not as in love with the used Tesla Model 3 as they once were.

While many cars did decline in value over the period, low-volume fancy cars such as the Porsche 911 went up. As did many luxury SUVs from makers like Mercedes-Benz and Maserati. iSeeCars says that the data suggests that the wealthiest used car shoppers are still eager and willing to pay for the specialty vehicles they really want.

Data from the study show that used hybrid vehicles have seen a one-year increase in value overall and that electric vehicles have declined by nearly 4%. This is just our own speculation, but perhaps the promise of EV price subsidies played a role here. Could it be that the price supports that were enacted in Q3 somehow delayed used electric car purchases?

As to the study methodology, iSeeCars researchers analyzed nearly 2 million one-to-five-year-old used car sales in December 2021 and 2022. The average listing prices of each car model were then compared between the two time periods, and the differences were expressed as a percentage difference from the 2021 price as well as a dollar difference.

You can view the full study summary at iSeeCars here. Tell us in the comments below if you think the market will continue to show a decline in value for the very popular Tesla Model 3.

Image of Tesla retail sales location by John Goreham. Charts courtesy of iSeeCars.

John Goreham is a long-time New England Motor Press Association member and recovering engineer. John's interest in EVs goes back to 1990 when he designed the thermal control system for an EV battery as part of an academic team. After earning his mechanical engineering degree, John completed a marketing program at Northeastern University and worked with automotive component manufacturers, in the semiconductor industry, and in biotech. In addition to Torque News, John's work has appeared in print in dozens of American news outlets and he provides reviews to many vehicle shopping sites. You can follow John on TikTok @ToknCars, on Twitter, and view his credentials at Linkedin

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