America’s car dealers have had too many cars on their hands for much of 2024. They’ve responded with aggressive discounts to help them move stock off the lot. Last month’s average new car sale included a 7% discount off the list price.
But the inventory glut is starting to resolve.
Car dealers count their stock in “days of inventory” — how long it would take to sell everything currently on the lot at today’s sales pace. An old industry guideline says 60 days is ideal.
The average dealership had 116 days’ worth of cars on the lot a month ago; today, it has 68.
It’s a misleading average, as we’ll explore. Some brands are still overstocked and making deals. But it may grow more difficult to find a discount on the car you want soon, depending on what you’re shopping for.
A Glitch in the Numbers
The change appears drastic, in part, because of a ransomware attack on the dealership industry. In June, hackers attacked a system many dealers use to track inventory and manage sales. That forced dealerships to sell cars with old-fashioned pen-and-paper methods.
When the system came back online, it took time for salespeople to catch up with record-keeping. Now that most dealers have an accurate count of what’s on the sales lot, the numbers look closer to normal.
Some Brands Have a Problem
Not every automaker, though, was in a good situation once the counts were up to date. Some brands have more than twice as much inventory as they’d like.
Alfa Romeo, Jeep, Dodge, Jaguar, Lincoln, and Ram all sit over 120 days. Those dealers might be more open to negotiating prices this summer.
Others, however, are undersupplied. Toyota, Lexus, and Honda are well below their target inventory levels. Those dealers know that the demand for their products outstrips the supply. Kia, Subaru, BMW, Porsche, and Acura are all under their targets, though not as drastically.
Trucks Easy to Find; Small SUVs Getting Scarcer
America’s best-selling vehicles tend to be full-size pickups. Automakers build them at a fast clip and often overshoot the numbers, giving buyers negotiating room.
Ford has 80 days’ worth of F-150 trucks — America’s best-selling vehicle — on hand, and Chevrolet has 70 days’ worth of Silverado pickups. But Americans are increasingly fond of small SUVs. Compact and subcompact SUVs such as the Honda CR-V and Chevrolet Trax, as well as sedans like the Toyota Camry and Nissan Sentra, continue to have an average lower days’ supply than the national average.
