- The average new car price declined last month, and that trend could continue — dealers have more cars in stock than they did last month
- Inventory numbers are still below last year’s level
The final sale price of the average new car dropped last month and could have further left to fall. America’s car dealers have 2.97 million new cars in stock — 4.2% more than they did a month ago.
Inventory levels remain 5.7% lower than this time last year.
The average car buyer paid $49,766 in October. Remarkably, that’s an improvement for shoppers from September, when the average sale crested $50,000 for the first time.
Prices fell largely because Americans bought fewer electric vehicles (EVs). A government program offering a $7,500 discount ended in September. That caused many Americans to rush to buy in September. Since EVs tend to cost more than gas-powered cars, the average sale price briefly peaked.
Prices often decline near the holidays, as a rush of year-end shoppers grabs advertised discounts. Simple supply and demand dictate that the growing supply could help shoppers see lower prices.
That won’t be true at every sales lot, however. Each car brand is in a unique situation.
Dealers traditionally aim to maintain a 75-day inventory of new cars — 60 days’ worth on the lot, with an additional 15 in transit or on order. The average brand entered November with an 88-day supply.
But that average is made up of outliers. Toyota and its Lexus luxury brand sit at the low end, with 41 or fewer days. Their dealers have little need to flex on pricing. Toyota dealers are also preparing for a brief shortage of the brand’s bestseller, the RAV4 SUV, as factories pause to tool up to produce a new version.
At the other end of the scale, Jeep dealers currently sit on a 146-day supply of new cars. Only Lincoln has more, with a jaw-dropping 155-day supply. Buyers might find the most favorable negotiations at those lots.
