- Car dealers ended March with a 79-day supply of new cars for sale, on average – about the level they traditionally target.
- That’s a dramatic drop from February’s 96, as strong March sales helped bring the supply back to normal.
America’s car dealers ended March with a 79-day supply of new cars for sale, on average. That’s a significant drop from February, when they had 96, according to data from Kelley Blue Book parent Cox Automotive.
Supply and demand govern car prices, so a declining supply suggests further price increases may be ahead.
The average new car sold for $49,275 in March, 3.5% more than a year ago.
Car dealers measure their supply of new cars for sale with a metric they call “days of inventory” – how long it would take them to sell out at today’s sales pace if they couldn’t acquire more. Every dealership has its own standards, governed by how its local community shops.
But an old industry rule of thumb tells most to aim for a 60-day supply of new cars on the lot, with another 15 days on order or in transit. March’s 79-day average isn’t far off that 75-day mark.
Related: Is Now the Time to Buy, Sell, or Trade-In a Car?
Every average masks extremes, however. Some car brands maintained lean inventories in March, which limits buyers’ negotiating power. Those dealers know that, if you don’t buy a car in high demand on their lot, someone else likely will.
Others are dramatically oversupplied and may be willing to negotiate.
Toyota and its Lexus luxury brand each had just a 36-day supply as March ended. Audi and Honda also sat well below average.
At the other end of the scale, Chrysler dealers had more than double the industry’s 79-day average. Dodge, Ram, and Jeep were not far behind, all over 125 days.
