Are Car Prices Coming Down

Car prices are slowly trending downward after years of steep increases, especially for used vehicles and certain SUV models. While new car costs remain high, increased inventory, higher interest rates, and shifting buyer demand are helping ease pricing pressure.

Key Takeaways

• Used car prices have dropped significantly: After peaking in 2022, used vehicle prices are down over 10% in many segments, offering better deals for buyers.
• New SUV inventory is rising: Dealers are stocking more new SUVs, leading to increased competition and more negotiation room.
• Interest rates impact affordability: Higher loan rates mean monthly payments stay high, even if sticker prices dip slightly.
• Electric and hybrid SUVs are stabilizing: As production ramps up, EV and hybrid SUV prices are becoming more predictable and accessible.
• Timing matters: End-of-year sales, model-year clearances, and holiday promotions offer the best chances to save.
• Certified pre-owned (CPO) programs offer value: CPO SUVs provide near-new quality at lower prices with extended warranties.
• Market varies by region: Urban areas with high demand may still see elevated prices, while rural markets offer more flexibility.

Are Car Prices Coming Down? What SUV Buyers Need to Know

If you’ve been eyeing a new or used SUV but hesitated due to sky-high prices over the past few years, you’re not alone. From 2020 to 2022, car prices—especially for SUVs—soared thanks to supply chain disruptions, chip shortages, and surging demand. But now, in 2024, there are signs that the tide is turning. Are car prices coming down? The short answer is: yes, but slowly and unevenly.

The good news is that the extreme price hikes of the pandemic era are behind us. Used car prices, in particular, have cooled off considerably. According to industry reports, the average price of a used vehicle has dropped by more than 10% since its peak in early 2022. New SUVs are also seeing more inventory on dealer lots, which gives buyers more leverage. However, it’s not a free-for-all. Interest rates remain high, and some popular models—especially electric and hybrid SUVs—are still in demand. So while prices aren’t crashing, they are becoming more reasonable.

Why Car Prices Are Finally Easing

Several key factors are contributing to the gradual decline in car prices, especially in the SUV segment.

Increased Inventory and Production

One of the biggest reasons car prices are coming down is that automakers have finally caught up. After years of production delays due to semiconductor shortages, factories are now running closer to full capacity. This means more new SUVs are hitting the market. For example, brands like Toyota, Honda, and Ford have significantly increased their SUV output in 2023 and 2024. With more vehicles available, dealers are less likely to charge premiums or add markups.

Cooling Demand for Used Vehicles

During the pandemic, used car prices exploded because people avoided public transit and wanted personal vehicles. But now, with remote work stabilizing and travel returning to normal, demand has softened. Fewer buyers are competing for the same used SUVs, which gives shoppers more options and negotiating power. A 2023 Hyundai Tucson that once sold for $32,000 might now go for $28,500—a meaningful drop.

Higher Interest Rates Discourage Spending

While higher interest rates are tough on buyers, they’re actually helping cool the market. With auto loan rates hovering around 7–8% for new cars and even higher for used, many consumers are delaying purchases or opting for cheaper models. This reduced demand takes pressure off prices. In a way, the Federal Reserve’s rate hikes are doing part of the work in bringing car prices down.

New SUV Prices: Are They Getting Cheaper?

New SUV prices haven’t dropped dramatically, but they’re no longer climbing at the same breakneck pace. In fact, some manufacturers have even reduced MSRPs on certain models.

Sticker Prices vs. Real-World Deals

The manufacturer’s suggested retail price (MSRP) for many new SUVs remains high—often $40,000 or more for a midsize model. However, dealers are now more willing to negotiate. In 2021 and 2022, it was common to pay *above* MSRP due to scarcity. Today, most buyers can expect to pay at or slightly below MSRP, especially if they shop around.

For example, the 2024 Toyota RAV4 starts at around $28,000, but with incentives and dealer discounts, you might land one for $26,500. Similarly, the Honda CR-V and Subaru Forester are seeing factory rebates and financing offers that effectively lower the cost.

Incentives and Promotions Are Back

Another sign that new SUV prices are softening is the return of incentives. Automakers are offering cash rebates, low APR financing, and lease deals to move inventory. Hyundai, for instance, has been running 0.9% APR financing on select SUVs, while Ford has offered $2,000 cash back on the Escape. These promotions weren’t common during the shortage years but are now a regular part of the sales strategy.

Used SUV Market: Where the Real Savings Are

If you’re looking for the biggest price drops, the used SUV market is where you’ll find them.

Prices Down Across the Board

According to Kelley Blue Book and Edmunds, used SUV prices have declined by 8–12% over the past 18 months. Compact SUVs like the Nissan Rogue, Mazda CX-5, and Ford Escape have seen some of the steepest drops. A 2021 model that once sold for $29,000 might now be available for $25,000 or less, depending on mileage and condition.

Certified Pre-Owned (CPO) Programs Offer Peace of Mind

One smart way to save is by choosing a certified pre-owned SUV. These vehicles are inspected, refurbished, and backed by extended warranties—often matching the coverage of a new car. Because CPO programs are backed by manufacturers, they tend to hold their value better than non-certified used cars. For example, a CPO 2022 Toyota Highlander might cost $38,000, while a similar non-certified version could be $35,000—but the warranty and peace of mind make the extra $3,000 worthwhile for many buyers.

Timing Your Purchase Matters

The best time to buy a used SUV is typically in the fall or winter, when demand dips and dealers are eager to clear out older inventory. You’ll also find better deals at the end of the month, when salespeople are trying to meet quotas. Shopping online through platforms like Carvana, Vroom, or even local dealer websites can help you compare prices quickly and avoid high-pressure sales tactics.

Electric and Hybrid SUVs: A Different Story

While gas-powered SUVs are seeing price relief, the electric and hybrid market is a bit more complex.

EV Prices Are Stabilizing, Not Dropping

Electric SUVs like the Tesla Model Y, Ford Mustang Mach-E, and Hyundai Ioniq 5 are still relatively expensive, with starting prices often above $50,000. However, prices aren’t rising as fast as they were. Tesla, for example, has cut prices multiple times in 2023 and 2024 to stay competitive. Federal and state tax credits can also reduce the effective cost by $7,500 or more, making EVs more accessible.

Hybrids Offer a Middle Ground

Hybrid SUVs like the Toyota RAV4 Hybrid and Ford Escape Hybrid are becoming more affordable as production scales up. These models offer excellent fuel economy without the range anxiety of full EVs, and they’re often priced just $2,000–$4,000 more than their gas-only counterparts. With gas prices still volatile, hybrids are a smart choice for budget-conscious buyers who want efficiency and reliability.

Tips for Getting the Best Deal on an SUV in 2024

Even with prices coming down, buying an SUV is a big investment. Here’s how to make sure you’re getting the best value.

Shop Around and Compare

Don’t settle for the first deal you see. Use tools like Edmunds, Kelley Blue Book, and TrueCar to compare prices across dealerships. You might find a $2,000 difference for the same model just by checking a few listings.

Negotiate Based on Invoice Price

Knowing the dealer’s invoice price—the amount the dealer paid the manufacturer—gives you leverage. Most dealers aim for a 5–10% profit margin, so if you offer close to invoice, you’re likely to get a yes. Online forums and pricing guides can help you find this number.

Consider Financing Options

Even if the sticker price is fair, high interest rates can inflate your monthly payment. Shop for pre-approved loans from banks or credit unions before visiting a dealer. Sometimes, manufacturer financing offers (like 0.9% APR) are better, but it pays to compare.

Look for Hidden Fees

Dealers often add fees for documentation, delivery, and “market adjustments.” Ask for a breakdown of all charges and question anything that seems excessive. In many states, documentation fees are capped by law.

Test Drive and Inspect Thoroughly

Whether you’re buying new or used, always test drive the SUV and, if possible, have it inspected by a trusted mechanic. For used cars, check the vehicle history report (Carfax or AutoCheck) for accidents, recalls, or title issues.

Conclusion: Yes, Car Prices Are Coming Down—But Stay Smart

So, are car prices coming down? The evidence says yes, especially for used SUVs and certain new models. Increased inventory, cooling demand, and higher interest rates are all contributing to a more balanced market. While we’re not back to pre-pandemic pricing, the extreme markups and scarcity are over.

For SUV buyers, this means more choices, better negotiation power, and real opportunities to save. Whether you’re after a rugged off-roader like the Jeep Wrangler, a family-friendly option like the Honda Pilot, or an efficient hybrid like the Toyota RAV4 Hybrid, now is a better time than the past two years to make a move.

Just remember: prices may be easing, but smart shopping still matters. Do your research, compare offers, and don’t rush. With a little patience and strategy, you can drive off in the SUV you want—without overpaying.

Frequently Asked Questions

Are new car prices dropping in 2024?

New car prices are stabilizing and, in some cases, slightly decreasing due to increased inventory and dealer incentives. While MSRPs remain high, buyers now have more room to negotiate than during the shortage years.

Why are used car prices going down?

Used car prices are falling because demand has cooled after the pandemic surge, and more vehicles are available. Higher interest rates have also reduced buyer enthusiasm, giving shoppers more leverage.

Is it a good time to buy an SUV?

Yes, especially if you’re flexible on model and timing. Late fall and winter often bring the best deals, and certified pre-owned SUVs offer excellent value with warranty protection.

Will electric SUV prices drop soon?

Electric SUV prices are stabilizing, and some brands like Tesla have cut prices to stay competitive. Tax credits and improved production may lead to further affordability in the coming years.

How can I get the best deal on a new SUV?

Shop around, compare prices online, get pre-approved for financing, and negotiate based on the dealer’s invoice price. Look for manufacturer rebates and low APR offers.

Should I buy a used or new SUV in 2024?

It depends on your budget and needs. Used SUVs offer the biggest savings, while new models come with the latest tech and full warranties. Certified pre-owned vehicles can offer the best of both worlds.