Auto market in transition

As we move towards the spring 2024 selling season, there’s yin and yang in the retail auto industry. New car prices finally receded below $49,000 in February for the first time in over a year, thanks to more dealer discounts and automaker incentives. But this also means retailers are feeling the squeeze as new cars are staying on dealer lots for twice as long as last year. 

The Cars Commerce New Car Price Index fell 3.2 ppt YoY to 132.6, reflecting the overall lower average new car price of $48,942. There’s also improvement in the entry-level new car market, where the share of sub-$30,000 vehicles increased for the second straight month, from 13% to 14% of available inventory. This is far from the 38% inventory levels seen pre-pandemic, but may represent a new normal as prices overall remain elevated. 

In the used vehicle space, offerings under $20,000 have, on average, 22,000 more miles on them than pre-pandemic vehicles, so shoppers need to hunt for high-quality used models. 

New and used EVs are also experiencing yin and yang, as demand for new EVs continues to slow while interest in used EVs continues to grow. We’re seeing OEMs recalibrating their EV strategy, exploring hybrids and fuel efficient gas options as new EVs sit on dealer lots longer. 

With this yin and yang, the role of dealers continues to be critical to putting the right car into the right hands. Based on Cars Commerce DealerRater data, consumers submitted a dealer review to Cars.com every 27 seconds in February. Those dealers with individual staff pages received 20 times more reviews than those without, providing a wealth of real-time feedback. 

As we shift to a buyer’s market, our team of automotive experts continues to monitor changes that could impact dealers, consumers and the overall market.

Rebecca Lindland
Sr. Director of Industry Data and Insights, Cars Commerce