Enhancements observed in vehicle stock levels, yet cost continues to be a challenge, according to a recent study
In the latest Cars Commerce July Industry Insights Report, some encouraging signs of improvement have been observed in the vehicle supply chain and semiconductor shortages, potentially indicating that new car prices might start to stabilise. However, the average purchase price of new cars remains high at $49,000.
Rebecca Lindland, senior director of industry data and insights at Cars Commerce, has stated that more than 750,000 sub-$30,000 vehicles are needed to get prices back on track. Unfortunately, in July 2023, there were only 333,000 new cars priced below $30,000, a stark contrast to the 1.1 million in 2019.
The report also sheds light on the used car market, where affordability shortages, particularly for low-mileage used vehicles costing under $20,000, are apparent. Inventory of used cars has increased by 1% in the past year, specifically for cars priced below $30,000. However, used cars for sale at $20,000 or less had an average mileage of 93,000 miles, which is 33% more than the average mileage of used cars priced under $20,000 over the past five years.
The improved market of used EVs has contributed to an increase in interest, as the Cars Marketplace saw an uptick of 19.3% in July searches for used EVs as compared to July 2022. Year over year, inventory of used EVs increased by 31%, with used EV prices falling by 10.4% since July 2023. Automakers like Kia, with models such as the Kia e-Niro, have significantly increased the supply of affordable used electric cars, contributing to a rise in interest in used electric vehicles.
Cars Commerce, the operator of Cars.com, recorded 615 million visits in 2023. The Cars Marketplace, operated by Cars Commerce, is an online vehicle marketplace that provides a snapshot of automotive buying patterns in the U.S. and Canada on a monthly basis.
New inventory is concentrated on mid- and high-priced vehicles, which may be a contributing factor to the ongoing high prices in the new car market. However, as the report suggests, more affordable vehicles are becoming harder to find.
In conclusion, while there are signs of improvement in some areas, the automotive market continues to face challenges, particularly in terms of affordability and the availability of lower-priced vehicles. The Cars Commerce July Industry Insights Report serves as a valuable resource for understanding these trends and navigating the ever-evolving automotive market.
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