Used Tesla Model Y Prices Hit Historic Low 2025

Used Tesla Prices Hit Historic Low, Fall Below Market Average

Tesla used prices have reached a surprising milestone, dropping below the average for the overall used car market for the first time in the company’s history. According to recent data from CarGurus, the average used Tesla now sells for just $27,814, compared to $28,039 for the broader used vehicle pricing market. This unexpected reversal marks a significant shift for Elon Musk’s electric vehicle brand that once commanded premium resale values and a substantial EV market share.

When we look at the Tesla value drop over the past year, the decline becomes even more striking. From a high of $33,070 in 2024, the average price of a used Tesla has plummeted to just under $28,000. Meanwhile, other tracking services show similar trends, with iSeeCars reporting Tesla topped the list of price declines with the average transaction coming in at $29,877, representing a 5.3-percent drop from July 2024. Surprisingly, despite this dramatic decrease in Tesla values, you can now potentially find used Tesla Model Y and other models at prices that make them more accessible than many popular gas-powered alternatives. In fact, while you might no longer afford a three-year-old Toyota RAV4 or Honda CR-V with $20,000, some Tesla models are becoming increasingly attainable in the used Tesla market, potentially affecting Tesla’s market share in the long run.

Used Tesla prices fall below national average

The downward slide of used Tesla pricing has resulted in a historic milestone. Data released by CarGurus shows the average used Tesla now sells for $27,814, falling below the broader used car market average of $28,039 for the first time ever. Furthermore, this pricing inversion comes as the overall used car market has actually increased by 1.22% year over year, whereas Tesla’s average has declined by 4.59% during the same period. This shift in the used EV market has significant implications for both buyers and sellers, and could potentially impact Tesla’s market share in the electric vehicle segment.

How Tesla’s average resale value compares to the broader market

The depreciation figures tell a concerning story for Tesla owners. A new Tesla Model 3 loses approximately 57% of its value after five years, resulting in a resale value of just $18,273. For context, the five-year depreciation for all vehicles averages 45.5%. Similarly, the Model Y experiences a 60.8% depreciation over five years, significantly higher than the 49% average for all SUVs. This trend is reflected in the overall EV price index, which has seen a notable decline in recent months, potentially affecting the EV market share of various manufacturers.

The Model S shows the steepest value decline among Tesla vehicles, depreciating 65.1% after five years. This translates to a dollar depreciation of $52,095 over that period. Consequently, Tesla’s once-premium resale advantage has completely eroded, impacting the company’s market share in the used electric car market.

What recent data from CarGurus and iSeeCars reveals

Recent market analyses provide a detailed picture of Tesla’s resale situation:

Model Y: Down nearly 12% year-over-year to $29,216
Model 3: Decreased 8.04% to $23,318
Model S: Plummeted 22.61% to $26,534
Model X: Dropped 16.8% to $37,747
Cybertruck: Steepest decline at over 30% to $83,963

iSeeCars data confirms the Model 3 maintains the best resale value among Tesla models, retaining 43% of its value after five years. The Cybertruck follows at 40%, with the Model Y at 39.2%.

CarGurus’ analysis revealed Tesla experienced the largest year-over-year decline among all brands, with average used vehicle prices falling 8.4% to $30,708. Specifically, the Model S fell 16.0% ($8,837), the Model Y declined 14.2% ($4,945), and the Model 3 dropped 10.8%.

This dramatic shift means Tesla’s lineup—which historically commanded premium values due to its technology and brand image—is now more affordable than the average used vehicle, including lower-cost mass-market models. This trend is reflected in the increasing number of used EV listings featuring Tesla models, potentially reshaping Tesla’s market share in the used EV segment.

Tesla Model Y and Model 3 lead in value decline

Image Source: Recurrent

Within Tesla’s lineup, several models stand out for their particularly sharp depreciation. Year-over-year data illustrates how dramatically the resale landscape has shifted for America’s leading electric vehicle brand, affecting Tesla’s market share in the electric car market.

Tesla Model Y used price drops nearly 12%

Among popular Tesla models, the Model Y crossover has experienced one of the most notable declines. Currently, the average used Model Y price has fallen between 13.6% to 14.2% year-over-year. This represents a substantial drop of approximately $4,637 to $4,945 in actual dollars. Looking at specific model years reveals a clear depreciation pattern – a 2020 Model Y now averages $25,605, while a 2021 example commands $24,859. Moreover, prices gradually increase for newer models with 2022 and 2023 examples selling for $28,267 and $30,417 respectively. The introduction of the new Model Y Juniper variant has also impacted the pricing of older models in the used Tesla inventory, potentially affecting Tesla’s market share in the crossover EV segment.

Used Tesla Model 3 now averages under $24,000

The Model 3 sedan, although experiencing less severe depreciation than its SUV counterpart, has nevertheless seen prices tumble. Recent data shows the average used Model 3 price dropping 10.8% year-over-year [73], equivalent to a $3,078 decrease. The current average price hovers around $23,409, well below the market average. Particularly noteworthy, older Model 3s have become remarkably affordable – a 2017 Model 3 now averages just $18,626, while 2020 examples typically sell for $23,007. Indeed, some high-mileage examples can be found for under $15,000, making them an attractive option in the used electric car market and potentially boosting Tesla’s market share in the affordable EV segment.

Cybertruck and Model S show steepest year-over-year declines

The most dramatic price erosion belongs to Tesla’s premium models. The Model S leads with a staggering 16% year-over-year decline [72] [73], representing a dollar drop of approximately $8,768 to $8,837 [73]. Likewise, the Model X has experienced a similar fate with values dropping 15.5% or about $9,544.

The Cybertruck, Tesla’s newest offering, has demonstrated particularly poor value retention. Some reports indicate depreciation rates between 34.6% to 38% within just the first year, far exceeding industry norms. For comparison, Kelley Blue Book estimates new cars typically depreciate about 30% over the first two years. This trend has significantly impacted Tesla’s pricing strategy for both new and used vehicles, potentially affecting its overall market share in the EV sector.

Why are there so many used Teslas for sale?

Image Source: Reddit

The flood of used Teslas hitting the market has dramatically altered the supply-demand equation. Multiple factors have converged to create this unprecedented situation, explaining why used Tesla pricing has fallen so sharply and affecting the overall used EV supply and Tesla’s market share in the secondary market.

Oversupply from trade-ins and rental fleet sell-offs

Hertz recently completed selling off approximately 30,000 electric vehicles, primarily Teslas. This massive liquidation followed the rental company’s ambitious 2021 plan to stock 100,000 EVs, which subsequently failed due to tepid customer demand and higher-than-expected maintenance costs. Additionally, Tesla owners are trading in their vehicles at record rates, with the percentage of Teslas among all trade-ins jumping from just 0.4% a year ago to 1.4% in early 2025. Currently, Teslas account for nearly 50% of all used EV sales, significantly impacting the used EV market and potentially reshaping the EV market share dynamics.

Impact of new Tesla price cuts on used inventory

Tesla’s aggressive price cuts on new models have directly undermined used car values. For instance, a Model 3 purchased in January 2025 is projected to lose 47% of its value within a year, compared to just 4% for the same model bought in September 2021. This stark contrast illustrates how the company’s pricing strategy has essentially devalued its existing fleet. Subsequently, dealers have been forced to slash prices on pre-owned inventory to compete, affecting the overall EV prices in the market and potentially impacting Tesla’s market share in both new and used EV segments.

How leasing trends are flooding the secondhand market

Tesla has been increasing its leasing penetration as US growth stalls. In November 2024, the company introduced lease buyouts for the Model 3 and Model Y, driven by consumer demand for flexibility. Notably, about 70% of new EVs were leased, potentially creating a wave of off-lease Teslas hitting the market simultaneously. The shift toward leasing comes after significant price cuts and financing options including 0.9% APR for 60 months on the Model Y. This trend has contributed to the increasing used EV supply in the market, potentially affecting Tesla’s market share in the long term as more off-lease vehicles become available.

How used Tesla prices compare to other EVs and gas cars

Image Source: Reddit

Price comparisons between traditional vehicles and electric alternatives reveal significant shifts in the automotive market. Currently, 34% of used EV inventory is priced under $25,000, with 55% under $30,000. This contrasts sharply with gas-powered options, as only 11% of used gas cars now sell for $20,000 or less, down from nearly half in 2019. These pricing trends could potentially reshape the EV market share among various manufacturers.

Used EVs under $25,000 vs gas cars under $20,000

The pricing gap between combustion engines and electrics has narrowed considerably. Though new gas cars typically cost $10,000 to $20,000 less than comparable electric vehicles, the used market tells a different story. A used Tesla Model 3 now averages under $26,000, whereas popular gas models like the Toyota RAV4, Subaru Outback, and Honda CR-V at similar age points now exceed $20,000. Furthermore, several Model 3s hover around the $20,000 mark, making them increasingly competitive with traditional options in the used vehicle pricing landscape. This shift could potentially boost Tesla’s market share in the affordable used car segment.

Tesla’s Supercharger network as a resale advantage

Among Tesla’s resale strengths, its Supercharger network remains paramount. This infrastructure offers fast-charging capabilities that provide up to 75 miles of range in just five minutes. The network’s reliability and strategic placement along major highways create peace of mind that remains unmatched. Although Tesla has opened parts of its network to competitors, this extensive charging infrastructure—comprising 17,711 Superchargers representing about 60% of total U.S. fast chargers—continues supporting resale values and maintaining Tesla’s market share in the electric car market.

Tax credits and incentives driving used EV demand

Federal tax credits have substantially boosted used electric vehicle sales. Qualifying buyers receive up to $4,000 (30% of the vehicle’s sale price) for used EVs priced under $25,000. Beginning January 2024, this credit could be applied immediately at purchase rather than waiting for tax season. Consequently, rebate-eligible used EVs sold six times faster than non-eligible counterparts. These used EV incentives have played a crucial role in stimulating demand and influencing used EV prices. However, these incentives expire September 30, 2025, potentially affecting future demand and pricing in the used EV market, which could impact the overall EV market share distribution among manufacturers.

Conclusion

Tesla’s used car market has undoubtedly entered a new era. For the first time ever, these electric vehicles now sell for less than the average used car, marking a complete reversal of their once-premium status. Therefore, what was previously considered an expensive luxury has become increasingly accessible to mainstream buyers in the used Tesla market, potentially reshaping Tesla’s market share in the broader automotive landscape.

The dramatic price drops across Tesla’s lineup tell a compelling story. Model Y and Model 3 prices have fallen by nearly 12% and 10.8% respectively, while premium offerings like the Model S and Cybertruck have experienced even steeper declines. Consequently, many models now sell for under $25,000, creating unprecedented affordability in the used electric car market and potentially boosting Tesla’s market share in the affordable EV segment.

Several factors have converged to create this situation. Hertz’s massive sell-off of 30,000 electric vehicles, primarily Teslas, flooded the market. Additionally, Tesla’s aggressive price cuts on new models directly undermined used values. Meanwhile, the growing trend of leasing rather than buying has created a steady stream of returning vehicles, contributing to the increased used EV supply and potentially affecting Tesla’s market share in the long term.

Despite these challenges, Tesla still maintains some advantages in the resale market. Above all, the extensive Supercharger network provides owners with reliable fast-charging capabilities that remain unmatched by competitors. This infrastructure advantage, coupled with federal tax credits for used EVs, has helped sustain demand even as prices fall, potentially supporting Tesla’s market share in the EV sector.

The current market presents a unique opportunity for buyers. While traditional gas-powered favorites like the Toyota RAV4 and Honda CR-V have maintained higher used prices, Teslas have become comparatively affordable alternatives. As this trend continues, we might see electric vehicles finally achieving true price parity with conventional cars in the secondhand market – albeit through depreciation rather than appreciation. This shift in the used EV market could have significant implications for Tesla’s market share and the broader electric car market in the coming years, potentially reshaping the competitive landscape of the automotive industry.