“New Car Inventory Has Exploded Higher”

New car prices have been trending lower for about a year due to increased vehicle production and elevated interest rates that have crimped demand. As a result, inventories are swelling at dealerships nationwide, with expectations for new and used vehicle prices to continue sliding into the spring season. 

A recent Kelley Blue Book report shows new car prices in January were down 3.5% compared with the same month one year ago. The average new car sold was $47,401. 

“Prices have been trending downward for roughly six months now as automakers are sweetening deals to keep the sales flowing,” Erin Keating, executive analyst for Cox Automotive, said in the report. 

The downward pressure is mainly because new vehicle inventory has surged. As of January, it stood at 2.66 million units, a 49% jump in the past year, according to Cox data.

“With rates higher so far this year, the consumer has limited sense of urgency right now other than cash in hand,” Jonathan Smoke, chief economist at Cox, said in a separate report.

In a post on X, Car Dealership Guy wrote that new car inventory in February “is rising fast.” 

February started with 80 days of new vehicle supply: 

The *highest* level since June 2020. 

Expect the deals to sweeten up for most brands.

New car inventory is rising fast

February started with 80 days of new vehicle supply:

The *highest* level since June 2020.

Expect the deals to sweeten up for most brands. pic.twitter.com/y2nsogRmkZ

— Car Dealership Guy (@GuyDealership) March 2, 2024

Online auto buy/sell platform CarEdge’s Zach Shefska noted on X: “For reference, new car inventory is up 195% over the past 30 months.” 

For reference, new car inventory is up 195% over the past 30 months. pic.twitter.com/T3bk4II2Xz

— Zach Shefska (@shefska) February 23, 2024

“New Car Inventory has EXPLODED higher,” another X user said. 

New Car Inventory has EXPLODED higher pic.twitter.com/9LgrwGkgmk

— Darth Powell (@GRomePow) February 22, 2024

This is great news for prospective car buyers – but terrible news for the millions of folks who bought cars during the Covid mania and are underwater on their auto loans.