New car inventory spike continues to produce targeted price drops

New car prices are falling but the impact remains isolated to specific brands, according to new data from Cars Commerce.

Driving the news: Both the new and used car markets are seeing more stability in everything from pricing to inventory, ending a long period of volatility for both segments. Cars Commerce’s analysis is based on data from their digital marketplace platform.

• New car prices are down about 1.5% from Sept. 2023. While used vehicle prices saw a greater decline of 5%, they remain relatively flat compared to the last six months.

• Inventories continue to rise, jumping 30% year-over-year — pushing days’ supply for new cars up 42% to 72 days. Some of this was driven by electric vehicles, which remain on dealer lots 14 days longer than the average.

• Domestic brands like Ford and Chevrolet saw particularly strong supply growth, alongside select import manufacturers like Honda.

One brand stands out: While inventory and new car prices are shifting, these trends are being heavily influenced by Stellantis brands.

• Jeep, Ram, Chrysler, Dodge, and Alfa Romeo saw respective supplies of 124 days, 125 days, 134 days, 181 days, and 211 days, making Stellantis one of the slowest-selling brands in both the mass market and luxury segments.

• Stellantis is also having an oversized impact on new vehicle pricing. Compared to the average decline of 1.5%, Jeep prices were down 5%, Ram prices declined 7%, and Dodge prices dropped 3%.

• While this may appear to reflect poorly on Stellantis, these numbers also represent a course correction for the company, which has struggled to move inventory due to a lack of incentives and higher prices.

New car affordability, accounting for both transaction prices and financing costs, is also improving, based on Cars Commerce’s New Car Price Index.

• The index saw a decline of 4.8 points year-over-year to a score of 131 (lower scores reflect improving conditions for buyers). This brings the industry closer to mid-2022 levels of affordability when prices were about halfway between pre-pandemic norms and their peak in 2023.

• Several options are seeing lower index scores than the industry average, making them a good choice for buyers. Like the Ford Mustang Mach-E, the Lincoln Corsair, the Volvo XC40, the Subaru Outback, and the Hyundai Ioniq 5. The XC40 and Outback.

Bottom line: While performance continues to vary heavily between brands, the car market as a whole is reaching a period of renewed stability, with most automakers seeing solid inventory and decent pricing. This sets the industry up for a strong final quarter as dealers gear up for what is likely to be a busy post-election season.

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