Severe winter storms across the country led to slower foot traffic at car dealerships last month, according to data from Kelley Blue Book parent Cox Automotive. As a result, some locations have an overabundance of vehicles that need to be sold. Now might be a good time to look for that new car you’ve been wanting.
Dealers traditionally try to keep about 75 selling days’ worth of cars in stock. Too few and they won’t have the combination of colors and features you want in inventory. Too many costs them money – they’re making payments on the cars on their lots through a complex financial arrangement called a floorplan loan. That average days’ supply for January rose to 98, up from 76 the prior month.
During the recent weather events, cars kept rolling in to sell, but buyers didn’t show up. Now, many lots are overstocked and likely to make deals. Data show that some cars are not moving off the showroom floor as quickly as others, but inventory ranges widely by brand. Toyota and its Lexus luxury division, for example, show just 28 and 33 days’ supply, respectively. On the other end, Jeep was stocked with 143 days’ supply of vehicles.
Dealers of brands with fewer days’ supply of inventory have less need to negotiate as buyers snap up cars. Those with excess inventory, however, are more willing to make a deal.
Check your local dealerships to see if they are offering incentives or price adjustments to accelerate sales. You can also use KBB to check prices of cars in your area.
