Used Car Market Faces Supply and Demand Shifts
Cars Commerce’s July Industry Insights Report highlights significant changes in the automotive sector. The report analyzes data from Cars.com, Dealer Inspire, and Accu-Trade to provide a comprehensive overview of the market.
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New Car Market Stability
New car prices have remained relatively stable at around $49,000. Increased supply is evident, especially in mid- to high-priced vehicles. However, there’s a scarcity of new vehicles under $30,000, with only 333,000 available compared to 1.1 million in July 2019. To realign prices, the industry would need to add over 750,000 new vehicles under $30,000.
Challenges in the Used Car Market
In contrast to the new car market, the used car segment struggles with a lack of low-mileage vehicles. This scarcity has led to price declines and an increase in high-mileage inventory.
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Key Trends in the Used Car Market
- Price Decreases: Used car prices have fallen 6% year-over-year.
- Inventory Shift: While overall used car inventory has slightly increased (1%), the composition has changed. There are more vehicles under $30,000.
- Price Drop in Lower End: Vehicles under $30,000 have seen a 3% price drop, with a 9% increase in inventory.
- Scarcity of Newer Vehicles: The availability of vehicles priced between $30,000 and $49,000 has decreased by 15%, reflecting a shortage of 1-to-3-year-old cars.
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Impact of High-Mileage Vehicles
Used vehicles priced under $20,000 now average 93,000 miles, a 33% increase in the last five years. These high-mileage vehicles require significant maintenance. The scarcity of low-mileage vehicles is particularly noticeable in the over-$50,000 segment, where the average price of used vehicles is $77,000, exceeding the cost of new luxury vehicles.
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These shifts highlight important trends in the automotive market.
This information provides insight into the automotive industry.
