New car inventory skyrockets but prices hold stable in Oct.

New vehicle inventory is up sharply year-over-year, but without a comparable decline in pricing consumer demand remains restricted according to Cars.com.

Driving the news: New car purchases and pricing remain extremely stable, shifting only slightly beneath a wave of inventory. Cars.com’s analysis is based on its marketplace and may not reflect the rest of the industry.

• New car list prices have now hovered around $49,000 for the last 13 months, reflecting a post-pandemic norm. Listings for sub-$30,000 vehicles are the fastest growing segment, jumping 51.8% year-over-year, but still only account for about 13% of the market.

• New car supply has surged 26.4% compared to last October. But with an increase of just 2% in demand, the number of days a vehicle spends waiting for purchase is also up, skyrocketing 37.4% last month.

• Demand for new cars may be held back by prices, which have declined only 0.5% from 2023, despite improvements in inventory.

Zooming in: The used vehicle market is also seeing stability, but with much less variation between supply and demand.

• Both supply and demand have fallen 2.1% and 2.2%, respectively, reflecting a normal market shift.

• While consumers are focusing on higher-mileage vehicles, the only pricing segment to see growth is the sub-$20,000 category.

Looking ahead: Electric vehicles continue to see the most volatility compared to other segments.

• New EV supply is up 35%, far more than the average for new cars and three times more than used EVs.

• But, while the market is dominated by new EV listings, used EVs are seeing most of the demand. Cars.com tracked 5.5 times the number of searches for preowned EV listings compared to new EVs.

• This makes sense, as used EV prices have declined sharply over the last year, falling 9.1%. Meanwhile, new EV prices are down only 1.9%.

Bottom line: While the market continues to shift due to various factors, the relationship between prices and demand is evident. Sellers seem to have found an equilibrium for now, but moving the needle forward will likely require an influx of cheap listings in the months ahead.

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