Tesla used car prices are finally starting to drop. It’s good for the affordability of Tesla vehicles, but it will put pressure on the company’s new car demand.
Over the last few years, as Tesla increased its new car prices, Tesla used car prices have also been rising fast.
Earlier this year, used Model Y prices went out of control and started to sell for more money than new Model Y vehicles. With Tesla now offering discounts on its new vehicles this month ahead of the new federal tax credit coming into effect next month, we are finally starting to see used Tesla car prices come down. On data showing that the average used Tesla price went down 17% since its peak in July.
The average price for a used Tesla in November was $55,754, down 17% from a July peak of $67,297. The overall used car market posted a 4% drop during that period, according to Edmunds data. The used Teslas were in dealer inventory for 50 days on average in November, compared with 38 days for all used cars.
The data also shows that the drop in price is killing the practice of people flipping Tesla vehicles.
With the price increases in 2022 and a long backlog, many people were flipping new Tesla vehicles for higher prices on the used car market for people who didn’t want to wait sometimes up to six months for a new car.
The data showed that by August, already a third of all used Tesla cars on the market were 2022 model-year vehicles. Since it doesn’t use the franchise dealer model and it owns all its stores, Tesla has a great hold on its used car business.
