2024 Could Be a Buyer’s Market — if You’re Buying New: Report

We’ve been feeling the squeeze of pandemic-era shortages for a few years now, but Cars.com parent company Cars Commerce’s new Monthly Industry Insights Report suggests there’s light at the end of the tunnel. New-car production is finally starting to normalize, and thankfully, much of the increase in new-car inventory has a list price under $30,000. On the flip side, however, the used-car market is still going to be affected by the slowdown in new-car production and sales for the next few years. This looming shortage of late-model used cars could push some used buyers to look at new cars instead — or perhaps push them toward less desirable models.

Related: Survey Says: Affordability, U.S. Manufacturing at Top of Mind for Shoppers

If either of these wider market trends make you want to look for a deal, you’re in luck. You may be able to score one on some good cars experiencing a slump in demand. Our report zeroed in on some models and vehicle types where there may be more room to haggle.

This Monthly Industry Insights Report was assembled by Cars Commerce’s data analysts using data across its family of companies, including listing and dealership data from the Cars.com marketplace, appraisal and trade-in data from AccuTrade and additional information from website provider Dealer Inspire.

A Promising Year for New Car Shoppers

What’s this weird feeling? Optimism? We almost forgot what that feels like, but our data show 2024 could shape up to be a buyer’s market provided you’re looking to buy new. New-car inventory increased by 36% year over year, with inventory levels close to what they were in February 2021 before pandemic shortages really started to hit. Meanwhile, search traffic — one indicator we use to analyze buyer demand — is down for new cars, which means those of you who are shopping may be able to score more deals.

The average list price of new cars on Cars.com was $49,096 in January 2024, down from an August 2023 high of $50,253. That isn’t a huge decrease, but increasing inventory supply could change that soon. Vehicles are sitting at dealerships longer — an average of 65 days, up 41% from the same time a year prior — and as that happens, dealers are more eager to move them off the lot. Per our data, Toyota, Honda, Subaru, Kia and Hyundai are the mass-market brands whose cars sell the fastest, while Chrysler, Dodge, Jeep, Ram and Buick have the slowest-moving inventories. Toyotas spend an average of 34 days on our site; Chrysler listings spend an average of 125 days.

Cars.com’s most popular news articles are all about affordability, so we see you out there looking for deals. While new-car inventory has grown across the board, it’s seen the biggest increase in cars listed for under $30,000 — a 63% year-over-year increase, to be exact. That said, these buyers are often the most affected by higher interest rates, and we’ve seen a 14.7% year-over-year decrease in search traffic for this price range.

At the opposite end, there’s a 44% year-over-year increase in cars listed for more than $50,000. Those cars are now sitting on the lots longer at an average of 73 days. Most of our new-car search volume is still in the $30,000-$49,000 price range, but it’s seen the sharpest year-over-year decline (19.1%) of all searches. Across the board, you have less competition if you’re searching for a car than you did a year ago. As a shopper, you can play a little tougher when negotiating for the price and terms of a new car right now.

It’s a Good Time to Shop for an EV

There’s no shortage of reports about softening electric-vehicle demand, which means that EV shoppers in particular have the upper hand in angling for a good deal. We’ve seen a 137% increase in dealers’ new EV inventory since the same time in 2023, and listings for them stay live for an average of 87 days on Cars.com — an increase of 152% since 2023. That’s a far longer time to sit on a dealership lot than most new or used cars. Relatedly, demand for new EVs as measured by Cars.com searches is down 9.2% from 2023, and prices have dropped 4.2% in the same timeframe. Even with wild outliers like Lucid Air Sapphires and Rolls-Royce Spectres at the high end of the category, the average EV price is down to $63,765.

We’ve already seen plenty of incentives in this category to try and recapture some of that lost demand. Plus, qualifying buyers of certain more reasonably priced EVs can now further lower the cost of admission by taking the federal EV tax credit of up to $7,500 off the price at the dealership.

Meanwhile, much of the increased search demand we’re seeing for EVs — a net 8.3% bump over January 2023 — has come from used EVs. Used-EV search traffic is up 13.1% during that time period, compared to new-EV search traffic declining 9.2%. Supply of used EVs increased 6.9% as more EVs hit the market. The average price of a used EV also dropped 19%, down to $38,724.

Used-EV listings stay up an average of 70 days, up 20.4% over 2023, with Rivian R1Ts spending the least amount of time for sale. Tesla’s core models (the Model 3, S, X and Y) are the four most searched used EVs on Cars.com, but curiously, they’re not in our top five most searched new EVs; the Ford F-150 Lightning tops that list. Tesla finally has solid competition in the EV space, and our search traffic backs it up.

Room to Haggle (or Not)

You can sometimes score a deal by looking for a less popular model, especially if it isn’t moving off the lot quickly. You might not be able to haggle as much on a new pickup truck given they make up seven of the 10 most searched new vehicles on Cars.com. (Two others are SUVs, the Ford Bronco and Toyota 4Runner, and the third is the Ford Mustang.) The Toyota RAV4 and Honda CR-V remain bestsellers despite not making it into our top 10 for search traffic; those buyers may simply know what they want before they log on. Others in demand, per our search traffic, include newer models like the Lexus TX and Toyota Grand Highlander Hybrid, as well as recently redesigned models, such as the Chevrolet Colorado, GMC Canyon and Toyota’s Prius and Sequoia.

Still, not every SUV is a hit. The top eight least searched vehicles on Cars.com are SUVs despite the body style comprising 56% of Cars.com’s new inventory. The list includes some that are simply longer in the tooth, like the Ford Edge, as well as some that are simply less competitive in their class, like Mercedes-EQ’s all-electric EQB and Jeep Compass.

There is one that surprised us to see on the least searched list: the Nissan Rogue, which won our Compact SUV Challenge twice in a row. The Rogue sits an average of 70 days on dealership lots — not Chrysler territory, but it’s still five days longer than the average for new cars. It’s not a flashy redesign or a brand-new model, but it’s a genuinely likable vehicle worth haggling for if you want a good deal.

Used Cars Feel the Pinch

We’re on the cusp of a shortage of used cars, with supply down 4% from January 2023. There are roughly 800,000 fewer used cars to choose from now, with an average list price of $28,859. That average price may be down 2.9%, but it’s still 36% higher than what it was in January 2019. Unfortunately, it looks like it will take a few years to get back to regular inventory levels with lower prices.

Additionally, retail and fleet sales were lower over the past few years thanks to the pandemic-era slowdown in sales and production. Customers are now keeping cars longer, with new buyers waiting an average of 6.5 years to sell or trade their cars, and the average age of cars on the road growing to 12.5 years. Lease returns are also way down, shortening the supply of vehicles 3 years old or newer on the used market. Higher interest rates, lower inventories, lower manufacturer incentives and lower residual values combined to raise monthly payments for potential lessees; thus, fewer cars were leased over the past few years. As a result, used cars for sale are more used than they used to be, with those less than $30,000 now 1.4 years older and with 10,000 miles more on the odometer than they were and had in January 2019.

Search traffic for used cars was up 13.7% from December to January, but it was down 7.6% from January 2023. Used cars spent an average of 57 days on the site, already shorter than new-car listings. Used shoppers on Cars.com search for many of the same things as new shoppers do — eight of the 10 vehicles on our most searched list are the same as those on the new list, with seven out of 10 being pickups. And it turns out that used buyers love searching for a depreciated sports car (who doesn’t?): The three other vehicles on our most searched list were the Ford Mustang, Porsche 911 and Chevy Corvette.

More From Cars.com:

• Here Are the 11 Cheapest Electric Vehicles You Can Buy
• What Are the Best Used Cars for $20,000?
• Leased and Used Electric Vehicles Now Qualify for Federal Tax Credits
• Study: These 3-Year-Old Cars Are the Most Dependable
• Find Your Next Car

New-Car Pricing Index Shows What Buyers Really Pay

New for this year is Cars Commerce’s New Car Price Index, which factors in taxes, loan interest and other purchase costs on top of a car’s price to show how much buyers are really paying. Elevated financing costs have been dissuading customers from buying cars even as the supply of new vehicles goes back to normal, so this is another way we measure broader trends.

Per our research, the average buyer ends up paying 32.7% over a car’s sticker price. While this figure is up 2.6% since December as many end-of-year and holiday incentives expire, it’s also down 3.3% since January 2023.

While we should add a caveat of the index is that scoring well depends highly on personal factors like customers’ credit history, down payment amounts and the number of cash buyers, our data show it was Honda Ridgeline buyers who paid the least over MSRP to purchase their cars at just 16%. Two models from our least searched vehicles list, the Ford Edge and Buick Envision, also made the list of top five cars when it comes to paying the least over MSRP at 16.7% and 16.9%, respectively.

High interest rates remain a factor both in driving the NCPI up and dissuading shoppers from taking on a new auto loan. While the Federal Reserve signaled its intent to lower interest rates in 2024, when it will do so is still to be determined. So, if you need to purchase a car now and end up with a less-than-ideal loan, here’s your reminder that you may be able to refinance it later in the year.

For more information, check out Cars Commerce’s full Industry Insight Report here.

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