In the summer of 2022, Clutch CEO Dan Park told me he was prepared for “two years of pain.” 

So I figured it was time to check in with Park again on the state of online car sales. 

When we last spoke, Park’s used-car e-commerce site was in the midst of a global semiconductor shortage that had shut down new-car assembly lines, stopped the supply of new cars and prompted buyers to flood into the used car market instead. 

The good news for used car sellers like Clutch was that demand drove up prices. The bad news for Clutch and other online vendors: investors’ pandemic-era interest in tech and e-commerce was faltering, and inflation was about to take a big bite out of consumers’ purchasing power.

As Paul Antony, executive chairman of dealership giant AutoCanada, described the pandemic in a recent earnings call: “Cars started selling for more than they were worth: used cars, new cars, everything…Things are coming back to normal now.” 

Nowadays you’ll see something that wasn’t so common a couple of years ago: used Teslas selling for under $35,000. 

At Clutch, that has meant selling more Teslas in the first quarter of this year than all of 2023, Park told me in April. 

CarGuru’s index of overall used car prices has fallen from $35,800 in May 2022 to about $31,800 this month, with Tesla prices falling over 31 per cent since May 2023 to about $45,000 as the automaker slashes new-car prices and as rental giant Hertz offloads some of its EVs. 

But people trying to trade in or sell their vehicles are noticing that they aren’t getting much for them—especially those who are underwater on loans after financing vehicles during a period of record-high prices and rising interest rates. 

With some edits for clarity and brevity, here’s how Park sees things now: 

On the EV slowdown: “A lot of Tesla owners saw the value of their cars drop off overnight. There’s also range anxiety, that we all care about. But that all said, what we’re seeing is EV sales are strong.” 

On AI: “A lot has changed in our business. We acquire almost 100 per cent of our supply from the general public. That’s all tech and algorithmically driven. So for a Mustang in the winter, we probably pay less than a Mustang in the summer. That algorithm adjusts dynamically.”

On figuring out what a car is worth: “Previously what we had was a relatively manual process where someone comes in, and they’d have to submit photos. And we’d set some rules. [Now], we can make these instantaneous offers. We have something like three million lines of data. 

“We want to provide the convenience of being able to sell your car, when that time comes. But also just understanding the value of your car is helpful as you make financial decisions going forward. 

“Any used EVs bought in the last few years are seeing pretty poor resale values, so if you’re the kind of a customer looking to hedge your resale values in the future, hybrids are generally the safer bet.

“Frankly, technology within EVs is generally superior. For those reasons, consumers are still opting to buy EVs.”

On e-commerce entrepreneurship: “Funding for growth equity effectively dried up in 2022 and early 2023. I was just in San Francisco, and it sounds like things are starting to come back. The markets seem healthier. [Investors] are having more productive conversations.” 

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