May New-Car Sales Boost Used-Car Inventory, Dropping Used-Car Prices 7% to $28,861, According to Cars Commerce May Industry Insights Report

Rhea-AI Summary

Cars Commerce launched its May Industry Insights Report, revealing significant trends in the automotive market. New-car sales have increased, leading to more trade-ins and a 7% drop in used-car prices to $28,861. Used cars now cost about $20,000 less than new vehicles, marking the largest price gap since 2018. Inventory for both new and used cars has risen by 4% month over month.

The new-car market saw a 40% year-over-year inventory increase, with prices stabilizing around $49,000. Consumer demand surged, driven by Memorial Day sales, resulting in a seasonally adjusted annual rate of 15.9 million new-car sales in May, the highest in 2024.

The electric vehicle (EV) segment also saw increased interest, with searches up 17% for new and 55% for used EVs. Prices of new EVs decreased by 4% year-over-year, while used EV prices fell 19%. Increased inventory and IRS tax credits are aiding consumer adoption of EVs.

Positive

• New-car inventory increased by 40% YoY, providing more options for consumers.
• Used-car prices dropped 7% YoY to $28,861, making them more affordable.
• Consumer demand surged with a 7% MoM increase in searches.
• Electric vehicle interest increased, with searches up 17% YoY for new and 55% for used EVs.
• Used EV prices decreased by 19% YoY, making them more accessible.

Negative

• New-car prices remained elevated at $49,000, limiting affordability.
• Despite increased inventory, new-car prices did not decrease, remaining steady.
• The high average price of $63,030 for new EVs limits widespread adoption.
• Used-car sales are slower compared to last year due to increased inventory.

On Average, Used Cars Cost About $20,000 Less Than New Vehicles — Largest Price Gap Since 2018

CHICAGO, June 13, 2024 /PRNewswire/ -- Cars.com Inc. (NYSE: CARS) (d/b/a "Cars Commerce Inc."), an audience-driven technology company empowering the automotive industry, today launched its May Industry Insights Report. Crafted by an expert team of Cars Commerce data analysts, the report provides macro and micro automotive market insights by analyzing supply, demand, pricing and consumer behavior data from across the company's platform, including Cars.com®, Dealer Inspire and AccuTrade.

"The rise in new-car sales, especially during seasonal promotions like Memorial Day, boosts the used-car market. More new-car inventory means more new-car sales, which means more trade-ins, increasing used-car inventory and bringing prices down — and that's just what we're seeing this month," said Rebecca Lindland, senior director of industry data and insights at Cars Commerce. "On average, used cars are selling slightly slower now than last year, when the market was quite lean. Prices are still elevated for new and used vehicles, but today, shoppers have more inventory, more choices and more time to find the vehicle that fits their budget and lifestyle."

Key May Market Highlights

• Used-car inventory sees signs of improvement with less mileage and lower prices. Inventory increased by 4% month over month thanks to trade-ins from strong new-car sales. As a result, the average price of used cars has dropped 7% year over year to $28,861, and the cost per odometer mile has gone down YoY. Though prices are still elevated compared to pre-pandemic, consumers looking for a good-quality vehicle under $30,000 are seeing improvement; these cars now have lower mileage, making them even more attractive.
  
  
• New car market sees rising inventory and elevated but steady prices.  New car inventory continues to recover, increasing 4% MoM and almost 40% YoY. This brings the total new-car inventory on the Cars.com marketplace to 2.32 million vehicles throughout the month, the highest level since December 2020. The increase in inventory and therefore shopper selection led to a new-car seasonally adjusted annual rate of 15.9 million in May, the highest in 2024. According to the U.S. Bureau of Economic Analysis, this is a significant figure, only surpassed three times since the chip shortage began in mid-2021. Consumer demand also increased in May, with searches up 7% MoM, driven by Memorial Day sales and increased shopping activity.
  
  However, a rise in inventory isn't translating into lower overall prices. New-car prices remained steady at approximately $49,000, consistent for the past eight months — but down from a high point of $50,300 in June 2023. Supplies of new cars are up to 67 days versus 49 days a year ago (+37%), which provides a good selection of cars for shoppers but something for dealers to monitor to avoid overstocking.
  
  
• Increased inventory and falling prices pique EV interest. The electric-vehicle market is seeing consumer interest tick up, with increased searches for both new (+17% YoY) and used (+55% YoY) EVs. Still, average prices of $63,030, 28% above the market, limits widespread adoption. New product launches, IRS tax credits for new and used EVs and manufacturer discounts are helping to bridge the price gap. With increased inventory (up 77% for new and 44% for used), prices are dropping — down 4% YoY for new EVs and a significant 19% for used EVs.
  
  Early adopters and enthusiasts are trading their EVs for newer models that often offer more extended range and battery life, driving up the stock in used EVs. Shoppers can now find used EVs less than 3 years old with low mileage (around 37,000 on average), providing a terrific opportunity to switch to an EV.

 To download the full report, visit www.CarsCommerce.inc.

*Inventory, searches and list price on Cars.com

ABOUT CARS COMMERCE

Cars Commerce is an audience-driven technology company empowering the automotive industry. The Company simplifies everything about car buying and selling with powerful products, solutions and AI-driven technologies that span pretail, retail and post-sale activities – enabling more efficient and profitable retail operations. The Cars Commerce platform is organized around four industry-leading brands: the flagship automotive marketplace and dealer reputation site Cars.com^®, award-winning technology and digital retail technology and marketing services from Dealer Inspire, essential trade-in and appraisal technology from AccuTrade, and exclusive in-market media solutions from the Cars Commerce Media Network. Learn more at www.carscommerce.inc.

 

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SOURCE Cars Commerce

FAQ

What is the current price of used cars according to Cars Commerce's May Industry Insights Report?

The average price of used cars has dropped 7% year over year to $28,861.

How much less do used cars cost compared to new cars?

Used cars cost about $20,000 less than new vehicles, the largest price gap since 2018.

What was the inventory increase for new cars in May?

New-car inventory increased by 4% month over month and almost 40% year over year.

What is the current average price of new cars?

The average price of new cars is approximately $49,000.

How has the electric vehicle market changed recently?

Searches for new EVs increased by 17% year over year, and searches for used EVs increased by 55%. Prices for new EVs decreased by 4% YoY, while used EV prices fell 19%.