The used-car market is currently facing a significant challenge due to a shortage of low-mileage vehicles, leading to a decline in prices and an influx of high-mileage inventory. This shift in the automotive industry has been outlined in the July Industry Insights Report by Cars.com Inc., a technology company that empowers the automotive industry by analyzing supply, demand, pricing, and consumer behavior data from its platform.
According to Rebecca Lindland, senior director of industry data and insights at Cars Commerce, new-car prices have remained steady at around $49,000 over the past year. However, there has been a significant increase in inventory levels, particularly in mid- to high-priced vehicles. The report highlights that there are only 333,000 new vehicles priced under $30,000 on the Cars Marketplace, compared to 1.1 million in July 2019. This shortage has resulted in a 6% decrease in used-car prices and a 1% increase in inventory, driven by an increase in vehicles under $30,000.
The scarcity of late-model-year vehicles in the used-car market has led to a decline in prices, with prices for used vehicles under $30,000 dropping by 3% year over year. The report also notes that the availability of vehicles priced between $30,000 and $49,000 has decreased by 15% year over year, reflecting the scarcity of 1-to-3-year-old vehicles typically found in this price range. Additionally, the average odometer mileage for used vehicles priced under $20,000 has increased by 33% in the last five years, reaching an average of 93,000 miles as of July 2024.
The shortage of low-mileage, lightly used inventory is particularly noticeable in the higher-end used-vehicle market. For vehicles priced over $50,000, the average price is $77,000, which is higher than the average cost of a new luxury vehicle. This scarcity of low-mileage vehicles has led to an influx of high-mileage inventory, which may require significant service to remain roadworthy.
In response to these market shifts, Cars Commerce is working to empower the automotive industry with powerful products, solutions, and AI-driven technologies that span pretail, retail, and post-sale activities. The company’s platform is organized around four industry-leading brands: Cars.com®, Dealer Inspire®, Accu-Trade®, and the Cars Commerce Media Network.
Overall, the shortage of low-mileage vehicles in the used-car market is leading to a decline in prices and an influx of high-mileage inventory. This shift in the automotive industry highlights the importance of adapting to changing market dynamics and finding innovative solutions to meet consumer demand.