Automakers Threading Inventory Needle, Balancing Consumer Demand in October 2025

• New-car inventory down 0.7% year over year as automakers remain disciplined in restocking new model-year inventory after selling down aged units.
• While overall new-car inventory declines, Toyota, Lexus and BMW buck inventory trends, all three brands boosted by more than 20% YoY while maintaining days-on-lot averages below the national norm.
• Average new-car price enters its 25th month of stability, sitting at $49,000, within a percentage point of this time last year. Prices are expected to head north as tariffs kick in and more 2026 models hit the lot.
• Gains at higher price points: Vehicles over $70,000 are up almost 11% YoY as automakers prioritize launching 2026 models with higher prices.
• Used-car market moving quickly: Days live has fallen 5.8% YoY to a 52-day average. Inventory is up slightly, driven primarily by lightly used $40,000-plus vehicles, skewing the mix toward more expensive vehicles and leading to a slight YoY average price increase. 

October saw declining sales as pull-ahead sales slowed and the federal electric-vehicle tax credits expired. Automakers continue to push out new model-year inventory faster than last year, with nearly half of new-car inventory being for model-year 2026.

Walking the Supply and Demand Line

New-car sales have hit the brakes coming into October, down 4.9% YoY on a seasonally adjusted basis. SAAR is at 15.3 million (down from 16.1 million YoY), but automakers remain disciplined in calibrating inventory. Overall, inventory declined 0.7% YoY as new model-year inventory has begun replacing outgoing units. Despite declining sales, days live is down 7.4% YoY as OEMs leverage new model-year vehicles with the newest features and sell down aging units.

Bucking the declining inventory trends are Toyota, Lexus and BMW. Always a major player in the mass market, Toyota upped inventory 31% YoY but still maintained a low days-on-lot average of 31 days, less than half the mass-market average. Meanwhile, in the luxury sector, both BMW and Lexus expanded their inventory by more than 20% while sustaining a below-average days-on-lot average of 54 and 30 days, respectively. Both are notably below the 72-day luxury average.

Tariff Pressure on Used Market Continues Pushing Prices Up

As tariffs push on new-vehicle pricing and availability, the used market has responded with its seventh sequential month of YoY price growth. The YoY rate of price increases dates back to April 2025, after the 25% tariffs went into effect on all imported new vehicles, showcasing the ripple effects throughout the market.

Days live is down 5.8% YoY for an average of 52 days on lots. Notably, used cars are selling faster than at any point in 2024. However, this marks a modest slowdown from 47 days in May, when the immediacy of tariffs spurred buyer urgency due to concerns of price inflation.

EV Market Recalibrates Following Sunsetting of Federal EV Tax Credits

As anticipated, the new-EV market saw a slowdown following the expiration of the federal EV tax credits. Inventory plummeted by almost a third YoY as automakers slowed production significantly in anticipation. The move was successful as, while inventory dropped, days live stayed relatively flat, suggesting automakers successfully kept inventory aligned with demand.

The used-EV market surged ahead, with used EVs selling almost twice as fast as new. Dealers stocked 19% more used EVs than October 2024, but October 2025 was still the largest month-over-month decrease on record for used-EV inventory — down 9%. Further, dealers sold down more of their 30-plus-day inventory compared to 2024, meaning they were more likely to make a deal this year on aged inventory.

David Greene
Industry and Marketplace Analytics Principal, Cars Commerce