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 leading audience-driven technology company empowering the automotive industry.
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, the supply levels have increased significantly, with a notable rise 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, primarily 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 for vehicles under $30,000 by 3% year over year. In contrast, the availability of vehicles priced between $30,000 and $49,000 has decreased by 15% year over year, reflecting the shortage of 1-to-3-year-old vehicles typically found in this price range. Notably, used vehicles priced under $20,000 now carry an average of 93,000 odometer miles as of July 2024, up 33% in the last five years. This increase in mileage may require significant service to keep these vehicles roadworthy.
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, surpassing the average cost of a new luxury vehicle. This scarcity has led to an influx of high-mileage vehicles in the market, which may not be as appealing to potential buyers due to the potential maintenance and repair costs associated with older, higher-mileage vehicles.
In response to these market shifts, Cars Commerce is working to provide solutions and technologies that empower the automotive industry. Their platform, organized around four industry-leading brands, aims to simplify the car buying and selling process and enhance retail operations for dealers. By leveraging powerful products, solutions, and AI-driven technologies, Cars Commerce is striving to make the automotive industry more efficient and profitable for all stakeholders involved.
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 is impacting both buyers and sellers in the automotive industry, highlighting the need for innovative solutions to address the challenges faced by the market. As the industry continues to evolve, companies like Cars Commerce are at the forefront, driving change and empowering stakeholders to navigate these shifts effectively.