This is an interesting report from Car Commerce, the research division of Cars.com. It looks at the significant shifts in the new and used car markets in the last five years. - Jerry Reynolds, Host of the Car Pro Show.
A new report finds that the auto industry is nearly unrecognizable from five years ago - with significant shifts taking place in the first half of 2024. Cars Commerce, a Cars.com company, shares its findings in its new Industry Insights Report. Among the findings of its data analysts:
- New-EV demand is up 930% since 2019
- Supply is up 825% since 2019
- Prices are up 56% since 2019
"The car market continues to recover and evolve, with June seeing ongoing price stabilization. When you take a step back for a broader perspective, however, the market has seen sweeping changes since the first half of 2024, particularly with the growing influence of electric vehicles as consumer demand and inventory continue to increase," said Rebecca Lindland, senior director of industry data and insights at Cars Commerce. "And compared to five years ago when the market was last stable, today's market is almost unrecognizable. Consumers are paying more than 30% higher prices for new and used cars with more than a million fewer vehicles available on each side of the market — but they're also making significantly more on trade-ins."
New- and Used-Car Markets: Prices Drop and Inventory Climbs Amid Supply Chain Recovery
Researchers say the broader new-car market has also evolved. Consumers are now spending over $11,000 more on a new vehicle, with prices rising 30% from $37,790 to $49,106 over the last five years. Inventory is down 24% in the same time period, resulting in 1.7 million fewer vehicles available for shoppers. Market recovery continues, allowing manufacturers to increase production and resulting in wider availability of new cars. In the first half of 2024, new inventory is up 13% compared to the first half of 2023, and new-car prices have decreased slightly (down 1%), maintaining an average of around $49,000 for the past nine months.
The used market has followed a similar path. Over the last five years, the average price of used vehicles has surged by 34%, from $21,480 to $28,815, and the ongoing inventory shortage has created a competitive market with 1.5 million fewer used vehicles available. Cars Commerce researchers say the first half of 2024 has offered some relief to buyers, as prices have decreased by 5% compared to the first half of 2023, saving consumers over $1,600. This decrease reflects a normalization from the peak prices seen in 2023, which were driven by intense demand and limited supply. Inventory for used vehicles is down 4% in the first half of the year compared to first half of 2023, with nearly 300,000 fewer vehicles available.
Trade-In Values Offer Leverage for Car Buyers
Trade-in values have increased by 48% since 2019, reflecting the higher value of vehicles in a market with constrained supply and high demand. Despite an 8% decrease in the first half of 2024 year over year, trade-in values remain elevated, providing added leverage for consumers negotiating the purchase of a new or used car.
Key June Monthly Year-Over-Year Highlights
- New-car prices are down 2% YoY, maintaining an average of $49,467.
- The average price of a used car is $28,912, a decrease of nearly 7% YoY.
- Interest in new EVs is up 20% year-over-year with prices down slightly (2% YoY), yet prices remain 30% higher than non-EVs.
- Demand for used EVs is up 55% YoY, supported by a nearly 14% price drop and an average age of almost 3 years as EV owners are purchasing new and trading in their lightly used EVs.
To download the full report, visit www.CarsCommerce.inc.
Photo Credit: Wellnhofer Designs/Shutterstock.com.