New-Vehicle Inventory Hits Milestone

By Staff Writer March 19, 2024 1425
New-car average pricing continues to drop, falling below the $50,000 barrier for the first time in more than a year. New-car average pricing continues to drop, falling below the $50,000 barrier for the first time in more than a year.

Average new-vehicle inventory reached a 12-month high in February, according to the ZeroSum State of the Dealer Report.

After a seasonal beginning-of-the-year dip in new vehicle supply in January, inventories resumed their climb in February, the report stated. The current month’s level surpassed December’s count, indicating that the industry is back on the ongoing growth trajectory that played out in 2023. Vehicle movement also saw a jump in February, and ZeroSum’s 30-day forecast for March points to additional growth. The upturn in February vehicle movement resulted in a five-point increase in turn rate after a drop of the same size last month. Days-to-move trends reinforce this dynamic, staying elevated at 61 days after a run in the 40s for most of the prior year. New-car average pricing continues to drop, falling below the $50,000 barrier for the first time in more than a year.

“After last month’s beginning-of-the-year break, we expected that February would get us back on a growth track and that’s exactly what happened”, said Jeff Englishmen, Vice President of Dealer Success at ZeroSum. “But increasing inventories continue to point to cautionary signals in the form of turn rates and days-to-move, meaning that dealers are still facing a more challenging environment to sell those vehicles.”

ZeroSum's New Vehicle Inventory (Month Start) 

February used car inventory took a small dip as dealers moved 1.29M vehicles—the most since August 2021. This sharp increase is expected to tick up slightly to 1.30M in March based on ZeroSum’s 30-day forecast. A key factor in used cats appears to be pricing, with that metric continuing its precipitous fall and down for the eight straight month. After hitting an average of $30,000 in the first half of 2023, marketed values have dropped by more than $3,800.

“The sustained pressure on pricing appears to be having an effect on movement of not only used vehicles but new vehicles as well,” said Englishmen. “The slower decline in new vehicle pricing is widening the gap between the two, which can cause consumers to consider their options carefully.”

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Last modified on Monday, 25 March 2024 17:53