Car prices are showing signs of softening after years of steep increases, especially for SUVs. While not all models are dropping in price, increased inventory, higher interest rates, and slowing demand are helping bring costs closer to pre-pandemic levels.
If you’ve been eyeing a new SUV but kept putting off the purchase, you’re not alone. For the past few years, car prices—especially for popular SUVs—have felt like they were climbing faster than a mountain trail. But now, there’s a glimmer of hope on the horizon. Are car prices going down? The short answer is: yes, in many cases, they are. While we’re not back to pre-2020 levels just yet, the market is shifting in favor of buyers.
The surge in SUV prices during the pandemic was driven by a perfect storm: supply chain disruptions, semiconductor shortages, and surging demand as people sought larger, more versatile vehicles. Dealers had the upper hand, often selling SUVs above sticker price with little room for negotiation. But now, things are changing. Automakers have ramped up production, inventory is building, and consumer demand is leveling off. This shift is creating a more balanced market—one where buyers can finally breathe a little easier.
So, what does this mean for you? If you’re in the market for an SUV, now might be one of the best times in recent years to make a move. Whether you’re after a compact crossover like the Honda CR-V or a full-size family hauler like the Toyota Highlander, there are signs that prices are stabilizing—and in some cases, dropping. Let’s dive into the factors driving this change and what you can do to get the best deal.
Key Takeaways
- Inventory is rising: Dealerships now have more SUVs in stock, reducing the need for markups and waitlists.
- Demand is cooling: After pandemic-driven spikes, buyer interest has stabilized, giving shoppers more negotiating power.
- Interest rates impact affordability: Higher financing costs are pushing some buyers out of the market, prompting dealers to offer incentives.
- Used SUV prices are falling faster: Pre-owned models, especially 1-3 year old SUVs, are seeing the steepest price drops.
- Electric and hybrid SUVs remain premium: While gas-powered SUVs dip, EVs and plug-in hybrids still command higher prices due to tech and battery costs.
- Timing matters: End-of-year sales and model-year clearance events offer the best chances to score a deal.
- Negotiation is back: With more supply, buyers can once again haggle on price, trade-in value, and add-ons.
📑 Table of Contents
Why Are SUV Prices Dropping?
Several key factors are contributing to the downward trend in SUV pricing. Understanding these can help you time your purchase and negotiate more effectively.
Increased Inventory Levels
One of the biggest reasons car prices are going down is that dealerships finally have more vehicles on their lots. After years of shortages, automakers have caught up with production. According to industry reports, SUV inventory in the U.S. has increased by over 60% compared to 2022. This surplus means dealers are less likely to charge over MSRP and more willing to offer discounts to move units.
Cooling Consumer Demand
During the pandemic, many people rushed to buy SUVs for safety, space, and versatility. That demand has since cooled. With remote work stabilizing and gas prices fluctuating, some buyers are rethinking their need for a large vehicle. This reduced urgency gives shoppers more leverage. Dealers know they can’t rely on scarcity to drive sales anymore.
Rising Interest Rates
Higher interest rates have made financing a new SUV more expensive. The average auto loan rate is now above 7%, up from under 4% in 2021. This has priced some buyers out of the market, especially for higher-end models. To compensate, manufacturers and dealers are rolling out incentives like cash rebates, low APR financing, and lease deals to keep sales moving.
New vs. Used SUV Prices: What’s the Difference?
When asking, “Are car prices going down?” it’s important to distinguish between new and used SUVs. The trends aren’t the same across the board.
New SUVs: Stabilizing, Not Plummeting
New SUV prices haven’t crashed, but they’re no longer skyrocketing. Most models are now selling closer to—or even below—MSRP. For example, the 2024 Ford Explorer is currently available at or below sticker price at many dealerships, a stark contrast to 2022 when buyers paid thousands over MSRP. Some brands, like Hyundai and Kia, are even offering $2,000–$3,000 cashback incentives on popular SUVs like the Tucson and Sportage.
Visual guide about Are Cars Prices Going Down
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Used SUVs: The Real Price Drops
If you’re looking for the biggest savings, the used market is where it’s at. Prices for used SUVs have dropped significantly over the past year. According to Kelley Blue Book, the average price of a one-to-three-year-old SUV has fallen by nearly 15% since early 2023. A 2021 Toyota RAV4, for instance, might have cost $35,000 last year but can now be found for under $30,000. This makes certified pre-owned (CPO) SUVs an excellent value.
Which SUVs Are Getting Cheaper?
Not all SUVs are seeing equal price reductions. Some segments and models are more affected than others.
Compact and Midsize SUVs
These are the sweet spot for savings. Models like the Honda CR-V, Subaru Forester, and Mazda CX-5 are seeing increased inventory and competitive pricing. Dealers are eager to move these high-volume models, so you’ll find more room to negotiate.
Full-Size and Luxury SUVs
While prices are softening, full-size SUVs like the Chevrolet Tahoe or luxury models like the BMW X5 still command premium prices. However, even here, incentives are appearing. For example, Cadillac is offering $5,000 off the 2024 Escalade, and Lexus has introduced low-rate financing on the RX 350.
Electric and Hybrid SUVs
EVs and hybrids are a mixed bag. While gas-powered SUVs are getting cheaper, electric models like the Tesla Model Y or Ford Mustang Mach-E remain expensive due to battery costs and high demand. That said, federal and state tax credits can offset some of the cost. The Inflation Reduction Act still offers up to $7,500 for qualifying EVs, making them more accessible.
How to Get the Best Deal on an SUV Right Now
With the market shifting, it’s a great time to be a smart buyer. Here’s how to make the most of falling SUV prices.
Time Your Purchase
The best deals often come at the end of the model year (August–October) or during holiday sales events like Black Friday. Dealers are eager to clear out old inventory to make room for new models. You can often save 5–10% by waiting for these periods.
Shop Around and Negotiate
Don’t settle for the first offer. Get quotes from at least three dealerships—online or in person. Use tools like Edmunds’ True Market Value or Kelley Blue Book to see what others are paying in your area. With more inventory, dealers are more willing to negotiate on price, trade-in value, and add-ons like extended warranties.
Consider Certified Pre-Owned
If you’re open to a used SUV, CPO programs offer the best of both worlds: lower prices and peace of mind. These vehicles are inspected, come with warranties, and often include perks like roadside assistance. A CPO 2022 Hyundai Santa Fe, for example, might cost $8,000 less than a new one but still have years of reliable service ahead.
Watch for Incentives
Manufacturers are rolling out incentives to boost sales. Look for cash rebates, 0% APR financing, or lease deals. For example, Nissan is currently offering $3,000 cash back on the 2024 Pathfinder, and Jeep has lease specials on the Grand Cherokee. These can significantly reduce your monthly payment or total cost.
The Bigger Picture: What’s Next for SUV Prices?
So, are car prices going down for good? Not necessarily—but the era of wild price hikes is likely over. Experts predict that SUV prices will continue to stabilize or decline slightly through 2024 and into 2025. However, external factors like inflation, supply chain issues, or shifts in consumer behavior could influence the market.
One trend to watch is the rise of electric SUVs. As battery technology improves and production scales up, EV prices may start to drop more significantly. Tesla has already cut prices multiple times in 2023 and 2024, and other automakers are following suit. If you’re open to going electric, the next few years could bring even more affordable options.
Another factor is the growing popularity of subscription services and car-sharing platforms. While not mainstream yet, these models could reduce individual ownership and impact long-term demand for new SUVs.
For now, the message is clear: the market is shifting in your favor. Whether you’re buying new or used, gas or electric, there are more opportunities than ever to get a great deal on an SUV.
Final Thoughts
The question “Are car prices going down?” now has a more optimistic answer than it has in years. While we’re not seeing a full return to 2019 pricing, the combination of increased inventory, cooling demand, and competitive incentives is making SUVs more affordable. This is especially true in the used market and for popular compact and midsize models.
If you’ve been waiting to upgrade your ride, now is a smart time to start seriously shopping. Do your research, compare offers, and don’t be afraid to walk away if the deal isn’t right. With a little patience and strategy, you can drive off in the SUV you want—without overpaying.
The road ahead looks smoother for buyers. So buckle up, do your homework, and get ready to enjoy the ride.
Frequently Asked Questions
Are new SUV prices dropping in 2024?
Yes, new SUV prices are stabilizing and in some cases dropping. Increased inventory and slowing demand have reduced the need for markups, bringing prices closer to MSRP.
Should I buy a used or new SUV right now?
Used SUVs offer the best value right now, with prices down significantly. However, new SUVs come with the latest features and full warranties, so it depends on your priorities and budget.
Will electric SUV prices go down soon?
Electric SUV prices are expected to decrease as battery costs fall and production increases. Tesla and other brands have already cut prices, and more reductions are likely in the coming years.
How much can I save by waiting for a sale?
You can save 5–10% by shopping during end-of-year clearance events or holiday sales. Some dealers also offer extra incentives to meet monthly quotas.
Is it better to lease or buy an SUV now?
Leasing can be a good option if you want lower monthly payments and plan to upgrade in a few years. However, buying makes more sense if you want to build equity and keep the vehicle long-term.
Are trade-in values still high?
Trade-in values have dropped from their 2022 peaks but remain relatively strong. Getting multiple appraisals can help you secure the best offer for your current vehicle.