Used car prices have started to decline after years of record highs, offering relief to budget-conscious buyers. This shift is driven by increased inventory, higher interest rates, and a return to normal supply chains—especially benefiting SUV shoppers.
If you’ve been eyeing a used SUV but held off due to sky-high prices, now might be the moment you’ve been waiting for. After nearly three years of unprecedented price hikes, the used car market is finally showing signs of cooling off. In fact, data from industry analysts shows that used vehicle prices have dropped by over 10% since their peak in early 2022. That’s a big deal—especially for families and commuters looking for reliable, spacious SUVs without breaking the bank.
So, what changed? A perfect storm of factors has shifted the balance between supply and demand. During the pandemic, semiconductor shortages crippled new car production, pushing buyers toward used vehicles. With fewer new cars available, used car prices soared. But now, automakers are back on track, producing more new vehicles than in years. This rebound in supply has eased pressure on the used market, giving buyers more options and more negotiating power.
Key Takeaways
- Used car prices are trending downward: After peaking in 2022, prices have dropped steadily due to improved inventory and reduced demand.
- SUVs are leading the price correction: Popular SUV models like the Honda CR-V and Toyota RAV4 are seeing notable price reductions.
- Higher interest rates cool demand: Rising auto loan rates have made financing more expensive, pushing some buyers out of the market.
- New car production is rebounding: Automakers are catching up on backlogs, increasing new vehicle supply and reducing pressure on the used market.
- Certified pre-owned (CPO) programs offer value: Buyers can now find better deals on CPO SUVs with warranties and inspections.
- Timing matters: End-of-year sales and model-year transitions are ideal times to buy a used SUV at a discount.
- Research is key: Use pricing tools like Kelley Blue Book and Edmunds to compare values and negotiate confidently.
📑 Table of Contents
Why Are Used Car Prices Dropping?
The decline in used car prices isn’t just a fluke—it’s the result of several interconnected trends reshaping the automotive landscape. Understanding these forces can help you time your purchase and get the best possible deal.
Increased Inventory and Supply Chain Recovery
One of the biggest reasons used car prices are coming down is the return of normal supply chains. During the height of the pandemic, car factories shut down or slowed production due to a global shortage of microchips. This created a massive backlog of new vehicles, which in turn drove up demand—and prices—for used cars.
Now, chip supplies have stabilized, and automakers are cranking out new models at pre-pandemic levels. In 2023, new vehicle inventory reached its highest point in over two years. As more new cars hit dealer lots, buyers have less need to turn to the used market. This shift has caused a surplus of used vehicles, especially as trade-ins increase with new purchases.
Rising Interest Rates Dampen Demand
Another major factor is the rise in interest rates. The Federal Reserve has raised rates multiple times to combat inflation, and auto loan rates have followed suit. As of late 2023, the average interest rate for a used car loan hovered around 8–10%, compared to just 4–5% in 2021.
Higher borrowing costs mean monthly payments are steeper, which has priced out many potential buyers. This reduced demand has forced dealers to lower prices to move inventory. For example, a $25,000 used SUV that once commanded a $450 monthly payment now costs closer to $520 with today’s rates—enough to make some shoppers pause.
Shift in Consumer Behavior
Consumer preferences are also evolving. With remote work still common for many, the urgency to upgrade to a newer or larger vehicle has lessened. Plus, economic uncertainty has made buyers more cautious about big-ticket purchases. Many are opting to keep their current vehicles longer or choose more affordable options.
This behavioral shift has led to a softer market, especially for mid-tier used SUVs. Buyers are no longer willing to pay a premium for convenience or peace of mind, which has pushed prices down across the board.
SUVs Are Leading the Price Correction
Visual guide about Are Used Cars Prices Coming Down
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While used car prices are falling across all segments, SUVs are experiencing some of the most noticeable declines. This is great news for families, outdoor enthusiasts, and anyone needing extra space and versatility.
Popular Models Seeing the Biggest Drops
Models like the Honda CR-V, Toyota RAV4, and Ford Escape—longtime favorites in the compact SUV category—have seen average prices drop by 12–15% over the past year. For instance, a 2020 Honda CR-V that sold for $28,000 in early 2022 now averages around $24,500. That’s a savings of over $3,500.
Even larger SUVs like the Toyota Highlander and Chevrolet Traverse are becoming more affordable. These vehicles, often used by families for road trips and daily commutes, are now within reach of more buyers thanks to improved availability and competitive pricing.
Why SUVs Are More Affected
SUVs were among the most sought-after vehicles during the pandemic, driving up their resale value. But as new SUV production ramps up, the used market is catching up. Dealers are now offering incentives, discounts, and certified pre-owned deals to move inventory.
Additionally, many buyers who rushed to buy SUVs during the shortage are now trading them in for newer models, increasing the supply of used SUVs. This cycle creates a healthier, more balanced market where prices reflect true value rather than scarcity.
How to Take Advantage of Lower Prices
With used car prices coming down, now is a smart time to buy—but only if you do it right. Here’s how to make the most of the current market.
Time Your Purchase Strategically
Timing can make a big difference in how much you pay. The best deals often come at the end of the year, when dealers are trying to meet sales targets and clear out old inventory. Similarly, when new model-year vehicles arrive (usually in late summer or early fall), used versions of the previous year’s models tend to drop in price.
For example, a 2023 Toyota RAV4 might see a price cut in August when the 2024 model launches. If you don’t need the latest features, this is a great opportunity to save.
Shop Certified Pre-Owned (CPO)
Certified pre-owned SUVs are a smart choice in today’s market. These vehicles undergo rigorous inspections, come with extended warranties, and often include perks like roadside assistance. And now, with prices dropping, CPO programs offer even better value.
A CPO 2021 Honda CR-V might cost $2,000 more than a non-certified version, but you get peace of mind and protection against major repairs. Given the current market, that premium is more justified than ever.
Use Online Tools to Compare Prices
Don’t rely solely on dealer quotes. Use trusted pricing guides like Kelley Blue Book (KBB), Edmunds, and TrueCar to research fair market values. These tools show you what others are paying in your area, helping you negotiate from a position of strength.
For instance, if KBB says a 2019 Ford Escape in your city is worth $21,000, and a dealer is asking $23,500, you have solid evidence to push for a lower price.
What This Means for First-Time Buyers
Lower used car prices are a game-changer for first-time buyers, especially those looking for their first SUV. With more affordable options available, entering the market is less daunting.
More Entry-Level Options Available
Compact and subcompact SUVs like the Nissan Rogue Sport, Hyundai Kona, and Mazda CX-30 are now more accessible. These vehicles offer the utility of an SUV with better fuel economy and lower insurance costs—perfect for young professionals or small families.
And with prices dropping, you might even afford a slightly newer model than you originally planned. A 2020 model that was out of reach last year could now fit your budget.
Financing Is Still a Challenge—But Manageable
While interest rates are higher, they’re not impossible to manage. Shop around for loans from banks, credit unions, and online lenders before visiting a dealer. Pre-approval gives you leverage and helps you avoid high dealer financing markups.
Also, consider making a larger down payment to reduce your monthly burden. Even an extra $2,000 down can shave $50 off your monthly payment on a $25,000 loan.
The Road Ahead: What to Expect in 2024
Experts predict that used car prices will continue to stabilize or decline slightly through 2024. New vehicle production is expected to remain strong, and consumer demand is likely to stay moderate due to economic uncertainty.
However, don’t expect prices to crash. The market is correcting, not collapsing. For SUV buyers, this means more choices, better deals, and a return to normalcy—without the panic-buying of recent years.
Watch for Electric and Hybrid SUVs
As electric and hybrid SUVs become more common, their used counterparts are starting to appear in greater numbers. Models like the Toyota RAV4 Hybrid and Ford Mustang Mach-E are entering the used market, offering eco-friendly options at lower price points.
While battery life and charging infrastructure are considerations, these vehicles can offer long-term savings on fuel and maintenance.
Final Thoughts
The era of inflated used car prices is winding down, and SUV buyers are reaping the benefits. With more inventory, smarter pricing, and a return to rational market conditions, now is a great time to shop for a reliable, affordable used SUV.
Whether you’re upgrading from a sedan, buying your first family vehicle, or simply looking for a good deal, the current market offers real opportunities. Just remember to do your research, compare prices, and negotiate confidently. The perfect used SUV is out there—and it might cost less than you think.
Frequently Asked Questions
Are used car prices really going down?
Yes, used car prices have been declining since early 2022 due to increased inventory, higher interest rates, and a return to normal supply chains. This trend is especially noticeable in the SUV segment.
Which SUVs are seeing the biggest price drops?
Popular models like the Honda CR-V, Toyota RAV4, and Ford Escape have seen price reductions of 12–15% over the past year, making them more affordable for buyers.
Is now a good time to buy a used SUV?
Yes, now is a favorable time to buy. With prices dropping and more options available, buyers have more negotiating power and better access to certified pre-owned vehicles.
How can I get the best deal on a used SUV?
Research prices using tools like Kelley Blue Book, shop at the end of the year, consider CPO programs, and get pre-approved for financing to strengthen your negotiating position.
Will used car prices keep falling in 2024?
Prices are expected to stabilize or decline slightly in 2024, but a major crash is unlikely. The market is correcting to a more sustainable level.
Are electric used SUVs a good option now?
Yes, used electric and hybrid SUVs like the Toyota RAV4 Hybrid are becoming more common and affordable, offering fuel savings and lower emissions for eco-conscious buyers.