Stabilizing Prices and Growing Inventory Create Bright Spots for Cost-Conscious Shoppers

CarGurus (Nasdaq: CARG), the No. 1 visited digital auto platform for shopping, buying, and selling new and used vehicles*, today released its 2024 Mid-Year Review, identifying areas of opportunity as affordability comes into greater focus for today’s shopper.

“In many ways, the market at mid-year is in a robust position with pent-up demand fueling sales, and improved pricing and selection giving shoppers more options. But this momentum is dependent on affordability as consumers face factors that are raising the all-in cost of car ownership today,” said Kevin Roberts, Director of Industry Insights & Analytics at CarGurus. “While interest rate cuts aren’t on the table in the near-term to help ease pressures, we are seeing rising opportunities for shoppers to find high-quality options at a great price.”

CarGurus data shows prices are moderating, with the average price of a used car now at $28,496, down 8% year-over-year, while the new car price is $50,214, down 3.3%. Rebounding inventory is helping to cool prices, where new inventory has increased 68% year-over-year and used has gone up 5% over the same time period.

While this has helped prop up overall sales demand for new and used vehicles, consumer search activity shows growing desire for more affordable price points in light of decades-high interest rates and rising insurance costs. At mid-year, used car searches on CarGurus for listings under $10,000 were up 26% year-over-year. New car searches under $30,000 were up 36% over the same period, raising the competition for a price segment that accounts for just 13% of listings.

To help shoppers navigate the market, the experts at CarGurus have identified the top areas of opportunity for savings:

• Sedans hit the sweet spot: The hunt for affordability is translating to an uptick in demand for new compact sedans, which have an average listing price of $29,600. Year to date, sales demand for the body style is up 17% year-over-year, with the Toyota Corolla, Honda Civic, and Nissan Sentra leading in sales by as much as 54% year-over-year.
• 2023 models could be priced to move: With new car inventory at four-year highs and 2025 models coming onto dealer lots, remaining 2023 models offer a chance for shoppers to buy new at a bargain. CarGurus data shows nearly 6% of new car listings in the U.S. are 2023 models. Models with the highest supply include the Ram 1500, with 141 market days supply (MDS), Chevrolet Silverado 1500 with 130 MDS, and Jeep Gladiator at 116 MDS. Shoppers considering a Ram 1500, for example, have the potential to save 12% with a 2023 model (average listing price of nearly $50,000) over a 2025 model year (average listing price of over $57,000).
• Oversupply of new electric vehicles (EVs) helping moderate prices: At mid-year, the MDS for new EVs was 117, compared to 78 for internal combustion engine vehicles and 54 for hybrids. Price adjustments on existing models and the introduction of more affordable options have helped the average new EV price decline by 9% from the high point in January 2023, down to $63,102. New EV prices are also influencing the used market, with average prices down 24% over the same period to $37,171.
• New York, Florida, and Maryland offer the most affordable used inventory: When examining the states with the highest concentration of high-quality, affordable used car listings, New York, Florida, and Maryland top the list. Nationwide, the share of listings for 2017 model year or newer vehicles that are priced $25,000 or under with less than 75,000 miles is approximately 21%. In New York, that share jumps to 27%. Conversely, South Dakota offers the least amount of options, with about 10% of market share.

To read about these trends and more, the complete 2024 Mid-Year Review is available here.