Examining the Factors Behind the Decrease in Pre-Owned Vehicle Stock Last Month
CarGurus’ August 2024 U.S. Intelligence Report Highlights Inventory Shifts
CarGurus has released its August 2024 U.S. Intelligence Report, revealing a continued drop in used vehicle inventory. The report indicates that used inventory levels fell by 2% year-over-year (YoY) in August, and are now 7.4% below the levels recorded in August 2022. In contrast, new vehicle inventory has surged, with August figures showing a 55.1% increase YoY and a staggering 193.3% rise compared to August 2022. Both new and used vehicle listings experienced a month-over-month (MoM) decline in days-on-market, though the reasons for these declines differ.
High Demand for Used Vehicles Amidst Limited Supply
Preliminary sales data suggests a surge in demand for used vehicles, reaching its highest level since March 2022. Kevin Roberts, CarGurus’ Director of Industry Insights, attributes this to growing consumer demand for affordability. He notes:
“Our Vehicle Demand Index highlights the increased consumer need for budget-friendly options. While overall used vehicle demand is up 7.4% year-over-year, activity has significantly increased for cars priced under $30,000. Conversely, demand for vehicles priced above this threshold has declined annually. With used car demand peaking and inventory dwindling, competition for affordable options is expected to remain high.”
Additional Insights from the Report
Price Trends: August saw a surprising rise in used vehicle prices due to tighter inventory, reaching an average of $28,500. In contrast, new vehicle prices approached 2022 levels, averaging $50,100—a 3.7% decrease YoY.
Shift in Powertrain Listings: The share of new internal combustion engine (ICE) vehicles in dealer listings has dropped to just under 82%, down from 93.1% in August 2022. While hybrids remain the leading alternative powertrain at over 9% of listings, electric vehicles (EVs) are rapidly gaining ground.
New Vehicle Demand Surge: The CarGurus Vehicle Demand Index showed an 11.8% increase YoY leading to Labor Day weekend.
EV Price Trends: Data from August indicates that used EV prices are on the rise again, averaging $38,000—the highest since January 2024.
Hybrid vs. ICE Pricing: Average list prices for new hybrids have risen to $49,200, approaching the average list price of ICE vehicles, which is $48,000.