Car prices dip as new vehicle inventory surges

Top line: After years of production chaos that led to rampant supply shortages, new car inventory is returning in droves and driving prices down, according to Cars Commerce’s March Industry Insights Report.

At a glance: New car prices dropped for the second month in a row, falling below $49,000. New vehicle inventory is up 37.2% year-over-year and 8.7% month-over-month.

Closer look: Unsurprisingly, the segment of new cars priced under $30,000 is the fastest-growing in the market, with inventory increasing by 77% compared to last year.

What we’re watching: In light of these conditions, Cars.com released its list of best-value new cars across multiple segments.

Half fall under the $30,000 mark.

Rankings (with median vehicle prices): 

• Compact Car: 

  • 2024 Kia Forte LXS ($21,710)

• Subcompact SUV: 

  • 2024 Nissan Kicks S ($22,597)

• Compact SUV: 

  • 2024 Chevrolet Equinox LS with Driver Confidence II ($27,995)

• Compact Pick-up Truck: 

  • 2024 Ford Maverick XL with Ford Co-Pilot 360 ($27,380)

• Mid-size Pick-up Truck: 

  • 2024 Nissan Frontier King Cab S 4×2 with Technology Package ($35,005)

• Full-size Pick-up Truck: 

  • 2024 Ford F-150 SuperCab XL 4×2 ($46,293)

• Electric Vehicle: 

  • 2024 Hyundai Ioniq 6 SE RWD ($40,160)

Details: For this study, Cars.com considered 85 non-luxury, mass-market, new car models with an automatic transmission, specific technology and driver assist features, as well as estimated fuel costs.

When buying a new vehicle: It's important to remember that fuel and the purchase price are just part of the overall cost. Car buyers must also consider warranty coverage, maintenance, insurance, and financing.

In fact, over 60% of shoppers surveyed by Cars.com mentioned that regular maintenance costs are a critical factor in their decision-making.

The trade-in advantage: 44% of shoppers planning to trade in their vehicle at the dealership are poised to benefit from current market conditions. 

There's a shortage of late-model used cars, which means newer, low-mileage vehicles are in high demand and fetching premium prices.

But: Trade-in values for older, used cars have declined significantly. Cars.com data shows that, in March 2024, the average trade-in values for vehicles fell to $28,433—that’s $1,196 less than in 2023.

On the used car side of things: Supply increased by almost 5% year-over-year, with average prices hitting a 32-month low of just over $28,669, a 5% decrease.

Cars.com says this is mainly driven by an increase in the supply of used cars under $30,000, which is up 12% year-over-year.

Similar to the new car market, there is an increased demand for the most affordable options available.

Notably:

• Used vehicles priced under $10,000 grew 19% from this time last year.

• But the average age of a used vehicle under $10,000 grew to 13.4 years old.

• In March 2024, 34% of all used were under $20,000, compared to 58% in 2019, but these, too, have more wear and tear than in previous years.

Top 10 used car searches on Cars.com

• Ford F-150: $33,304

• Chevrolet Silverado 1500: $32,924

• Chevrolet Corvette: $60,761

• Toyota Tacoma: $32,261

• Ford Mustang: $26,886

• Ram 1500: $33,978

• Porsche 911: 141,026

• Toyota Tundra: $36,220

• Honda Accord: $20,109

• Toyota Camry: $21,266

Bottom line: Affordable cars are out there — if buyers know where to look. But for dealerships, navigating the used car market can be tricky, especially with the influx of older, higher-mileage vehicles at lower prices.

Are you still relying on auctions? We want to help you get out of this costly co-dependent relationship and start saving an avg. of +$2,700 per vehicle acquired with AccuTrade. 

How? Tap into the stream of high-quality used cars that come through your service drive every single day. All you need to do is empower your team with a simple appraisal process that gives your customers instant, guaranteed offers.

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