Enhancements in automobile stock, yet affordability concerns persist, according to a recent report
In a recent report, Cars Commerce, the company behind Cars.com, has shed light on the current state of the automotive market in the U.S. and Canada. The report, titled the Cars Commerce July Industry Insights Report, offers valuable insights into the buying patterns, pricing, and availability of new and used vehicles.
One of the key findings of the report is the increasing popularity of electric vehicles (EVs) in the used market. In July, there was a 19.3% increase in searches for used EVs compared to July 2023, indicating a growing interest in these environmentally friendly vehicles. Interestingly, the inventory of used EVs has grown by 31% year over year, suggesting that the electric vehicle market is becoming more accessible as prices decline.
However, the report also highlights some challenges in the used vehicle market. The average mileage of used cars priced at $20,000 or less in July was 93,000 miles, which is 33% more than the average mileage over the past five years. This could indicate that high-mileage used vehicles may require significant service to remain roadworthy, suggesting that the true cost of such vehicles may be higher than the listing price.
Moreover, the report suggests that the used vehicle market is facing affordability shortages. The inventory of used cars priced below $30,000 has increased by 1% in the past year, yet the market is short of low-mileage used vehicles that cost under $20,000.
The new car market also faces challenges, with new inventory concentrated on mid- and high-priced vehicles. In July 2023, there were only 333,000 new cars priced below $30,000 on the Cars Marketplace, compared to 1.1 million in 2019. The average purchase price of new cars remains high at $49,000.
Rebecca Lindland, senior director of industry data and insights at Cars Commerce, stated that to get prices back on track, more than 750,000 sub-$30,000 vehicles would need to be added to the market. She also suggested that semiconductor shortages and vehicle supply chain problems may have abated, which could lead to improvements in the market in the near future.
Despite these challenges, the report offers some positive signs. Used car prices have declined by 6% since July 2023, and used EV prices have fallen by 10.4% since the same period last year. Brands like Kia and Hyundai have significantly improved their availability of cheaper cars under $30,000, offering models with better affordability and features.
In conclusion, the Cars Commerce July Industry Insights Report provides a comprehensive overview of the current state of the automotive market. It highlights the growing popularity of electric vehicles, the challenges in the used and new car markets, and offers some promising signs of improvement in the near future. As always, consumers are encouraged to do their research and consider their options carefully when making a car purchase.
