ZeroSum, a retail agency that provides inventory-based digital marketing solutions tailored to dealers, has released its May State of the Dealer report.

ZeroSum’s April highlights point to a stabilizing supply and demand picture, representing what is shaping up to be a new normal. These two sides of the equation appear to be moving toward a relatively stable and foundational equilibrium that dealers can plan against. The pace of inventory growth is slowing, with a 1% MoM increase in April. It has long been expected that new vehicle supply would recover but not reach pre-pandemic levels (~3.3M), and it appears that this recent plateau is approaching somewhere near full market recovery.

Vehicle movement, meanwhile, largely kept its gains from the previous month and is expected to maintain that level in May. Higher incentives, which have generally accompanied the increase in supply, are providing a boost to shoppers. Tax refunds, which historically spur vehicle sales in March and April, are helping as well. These supply and demand dynamics are also contributing to a leveling of turn rate and days-to-move metrics, with the former flat MoM at 41% and the latter in the low 60s for the fourth straight month, and marketed prices have also been within a relatively narrow range since November.

“It certainly looks like we are arriving at a new and healthy normal, with supply and demand in a viable equilibrium situation going forward,” said Jeff Englishmen, Vice President of Dealer Success at ZeroSum. “If this continues, it provides a foundational set of dynamics for dealers to plan against and deal with.”

Used vehicle inventories remained flat in the current month, while vehicle movement retreated from a strong March but held onto gains compared to the end of 2023. The May movement forecast points to a similar outcome. Used car pricing has ticked up slightly since February but remains in a relatively narrow range.